Mr. Cramer took a look at the 10 underperforming Dow stocks in 2010 that appear to be holding back the Dow Jones index.

American Express (AXP: 39.72 +0.05%) – despite the stock being down 2% for the year, Cramer wouldn’t be surprised to see the financial stock rally 12%. Corporate travel is coming back and Cramer has a $45 price target for AXP.

Exxon Mobil (XOM: 67.22 +0.66%) – has declined 2% this year and has failed to rally despite oil prices climbing to $80 per barrel. Cramer feels than until the deal with XTO Energy (XTO: 47.37 +0.55%) goes through, the energy stock is going to remain range bound. Cramer mentioned that he would be surprised if the stock goes up more than 3 points in the near future.

Chevron (CVX: 73.96 -0.46%) – despite the recent positive statements by Chevron at an analyst meeting, Cramer recommends that investors sell the stock.

IBM (IBM: 125.62 +0.06%) – while Cramer expects that IBM is having a good quarter and will likely report great earnings next month, the stock is likely stuck in neutral until then.

Coca Cola (KO: 54.20 +0.04%) – Cramer believes that Coke won’t be moving up from its 5% decline any time soon.

Pfizer (PFE: 17.15 -0.46%) – Cramer labeled Pfizer as the “Lusitania of the Dow” and predicts that the stock will lose another $1.

Microsoft (MSFT: 28.97 +0.59%) – Windows 7 appears to be selling very well and Cramer doesn’t expect Microsoft to stay low much longer. Cramer set a $32 price target for Microsoft.

AT&T (T: 25.52 -0.16%) and Verizon (VZ: 29.75 -0.53%) – the price war between these two telecom giants has resulted in both declining over 10% this year. However, Cramer predicts a recovery for both companies in the near future and expects that both will raise their dividends this year. His price target for AT&T is $28; while his price target for Verizon is $33.

Alcoa (AA: 13.57 -0.73%) – has been the Dow’s biggest loser in 2010 with a 15% decline. Cramer still doesn’t recommend the stock despite their strong cash flows.

However, there are a few shining stars among the Dow components as well. Cramer pointed to Cisco Systems (CSCO: 25.872 -0.99%), McDonald’s (MCD: 64.94 -0.25%) and Bank of America (BAC: 17.11 +1.85%).

Weatherford International (WFT: 17.23 -0.35%) rose 2.3% – Cramer feels that Weatherford is the cheapest oil stock around. He recommends that investors buy the stock “aggressively” at its current price around $16.

Prudential (PUK: 15.98 +2.30%) gained 3.0% – Cramer is very bullish on the stock and feels the business is “absolutely fabulous”.

Potash (POT: 118.25 +0.72%) dropped 0.2% and Terra Nitrogen (TNH: 91.00 -0.42%) fell 0.8% – Cramer feels that Terra Nitrogen is a great play on agriculture and he’s sticking with the stock, but prefers Potash given the momentum he’s seeing.

ArcSight (ARST: 26.39 -0.64%) fell 0.3% – Cramer recommends ArcSight as the top internet security firm for investors given its momentum and growth prospects.

Zhongpin (HOGS: 13.52 -0.22%) dropped 0.7% – Cramer remains bearish on Chinese stocks.

Symantec (SYMC: 17.45 +1.45%) dropped 0.7% – Cramer was bearish and recommended ArcSight instead.

Starwood Hotels reported a monster quarter with earnings of $0.51 per share. Wall Street analysts were only looking for earnings of $.22 per share. The resulting 132% upside surprise has gone largely unnoticed.

It is important to note that Starwood’s earnings performance was not just driven by aggressive cost cutting as we have seen from many other earnings “beats”. Business at the hotel chain seems much better than Wall Street anticipated and the company increased their guidance for the remainder of 2010. The company is already benefiting from improving economic conditions as both business and leisure travelers are starting to spend once again.

Cramer believes that Starwood is also well positioned to capitalize on the economic recovery as the company was active during the past recession by opening new locations and closing underperforming hotels.

With the vast majority of their hotels located overseas, Starwood seems like a perfect play on the return of business travel.

Cramer is clearly very bullish on Starwood Hotels and recommends that investors buy Starwood stock.

Jim Cramer said that the fourth quarter was “magnificent for retailers” despite the doom and gloom forecasts that seem to be daily in the headlines.

Deckers Outdoor (DECK: 129.92 -1.07%) – with its highly successful Ugg boots brand, saw an impressive $0.94 earnings beat.

Gap (GPS: 22.37 +0.58%) – the retailer reported earnings that were $.02 above the Street estimate and their positive outlook was accompanied by an 18% dividend increase. Although Cramer did express some concern over the Gap pursuing both a dividend program and a stock repurchase program.

True Religion (TRLG: 28.69 +3.42%) – despite the very high price of their products, the company was able to report a good quarter with earnings at $.04 ahead of consensus estimates.

Home Depot (HD: 31.71 +0.09%) and Sears Holdings (SHLD: 103.28 +2.25%) – strong earnings by the home retails signal a potential turnaround in the housing markets.

Saks (SKS: 7.88 +3.68%) and Macy’s (M: 20.98 +1.45%) – sales were even strong in apparel stores.

The positive results from retail stocks are a very bullish indicator and seem to have sent the bears into hiding for the time being.

Over the last 6 months since Mr. Cramer unveiled his mobile internet index, the Dow Jones Industrial average has gained 1,000 points or 11%. The technology-focused Nasdaq index is up 12% in the same time frame. So how has the Mobile Internet Index performed?

Unfortunately, the last 6 months has to be considered a mild disappointment for the mobile internet index. The index as a whole is up 9.6% during that time, but has underperformed the 12% gain in the Nasdaq.

The Mobile Internet indexes performance has been weighed down by a couple of extremely poor performances. The worst performer in the index, Palm (PALM: 5.71 +0.35%), has lost over half its value in the last 6 months. Tessera Technologies (TSRA: 20.25 +1.81%) stock has fallen over 30%.

While the overall index performance has been disappointing, there have been some stellar individual stock performances. Sandisk (SNDK: 34.06 +1.70%) is up an amazing 65% over the last six months. Starent Networks (STAR: 0.00 0.00%) shares have soared over 56% since last August. In fact, 14 out of the 21 stocks have posted 6 months gains with 12 of those 14 stocks delivering double digit gains.

The big names of the index, like Apple (AAPL: 224.84 +0.82%), Google (GOOG: 576.45 +2.90%) and Cisco Systems (CSCO: 25.872 -0.99%) have also outperformed the broader market indexes with Apple leading the way with a 21% gain.

Tuesday
• Whole Foods (WFMI: 35.15 -0.45%) – Cramer is watching same store sales (SSS) to see how much the economy is continuing to impact consumer demand.

Wednesday
• Chesapeake Energy (CHK: 25.66 -0.16%) – Cramer wants to find out about their drilling costs and see if the company reports any new finds.
• Agnico-Eagle Mines (AEM: 58.12 -1.39%) – Cramer wants to see how their mining costs are tracking.

Thursday
• Bucyrus International (BUCY: 65.86 +0.35%) – Cramer will be looking beyond the numbers to see what commentary the company has on the strength of demand in China.
• First Solar (FSLR: 110.95 +4.45%) – Cramer wants to see how much of money First Solar is making on each panel and reliant the company is on government subsidies.

Monday
• Humana (HUM: 48.32 +0.79%) – Cramer wants to see how people react to the report to see if health care reform has any life left.
• ExxonMobil (XOM: 67.22 +0.66%) – Cramer hopes to hear an update on the future of natural gas in the U.S.
• Plum Creek Timber (PCL: 36.75 -0.33%) – Cramer believes this will give us an idea if the real estate market has bottomed out.

Tuesday
• Whirlpool (WHR: 86.94 -0.36%) – Cramer wants to see how the company is doing in Brazil.
• Dow Chemical (DOW: 29.06 -0.55%) – Cramer is watching to see what demand is currently like for their chemicals.
• BEA Aerospace’s (BEAV: 28.18 +1.51%) – Cramer is listening to see if he is too bullish on Boeing (BA: 70.01 +3.27%).

Wednesday
• National Oilwell Varco’s (NOV: 43.71 +0.85%) – Cramer believes this report will show how strong demand is for natural gas drilling rigs.
• International Paper’s (IP: 25.11 +0.08%) – Cramer says this report will be a view of the health of the global economy.
• Polo Ralph Lauren (RL: 82.35 -0.70%) – this report will indicate the health of the high end consumer.
• Several mobile internet stocks will also report on Wednesday afternoon, and Cramer wants to see their reaction to the iPad and the recent drop in Apple’s (AAPL: 224.84 +0.82%) stock price.

Thursday
• Several dividend stocks including Clorox (CLX: 62.35 +0.55%), Kellogg (K: 52.51 +0.15%), Suburban Propane Partners (SPH: 46.80 -0.66%), and Pitney Bowes (PBI: 23.11 +1.32%) all report earnings on Thursday.
• Mastercard (MA: 249.60 +1.27%) – Cramer hopes this will give us an idea about the number of transactions going on in the marketplace.

Friday
• Wyerhauser’s (WY: 43.00 -1.26%) – Cramer is watching this report to get some insights into the new housing and land market.

Qualcomm
Qualcomm (QCOM: 38.88 +0.52%) fell 3.2% after Mr. Cramer called their latest earnings report “an abomination”. Cramer was clearly upset at QCOM’s management for delivering such embarrassing results. The poor guidance was particularly frustrating given the company’s bullish posture 2 weeks ago at the Consumer Electronics show.

Joy Global
Shares of Joy Global (JOYG: 57.31 +0.84%) and Bucyrus International (BUCY: 65.86 +0.35%) plunged 2.9% and 5.0% respectively following bearish comments by Jim Cramer. He views the slowdown in China having a negative impact on both stocks. Cramer doesn’t believe the stock has hit bottom yet and cautioned investors to wait to buy this stock.

Deere & Co.
Deere (DE: 58.49 -1.33%) stock slid 2.3% after Cramer warned that the stock was headed down in the short term. While Cramer still believes that Deere is a good company, the stock is feeling the negative impact of the slowdown in China. For investors with a 6-9 month outlook the stock will still likely make them money, but in the short-term look for more selling.

Cramer has been bullish on Skyworks Solutions for over a year and has seen to stock rise 208% since his initial buy recommendation. The make of smartphone power amplifiers recently reported strong quarterly results that exceeded Wall Street’s consensus estimates by $.02. The company also increased their guidance numbers, but the stock price continues to fall.

In an interview with Mr. Cramer, Skyworks CEO David Aldrich opined that we are still in the early stages of mobile internet adoption. He believes that Skyworks is delivering better margins than most of their competitors and sees tremendous growth opportunities ahead for leveraging the technology developed for smartphones. This technology can be utilized in various products like medical devices, satellites, etc.

Cramer is definitely still bullish on the mobile internet sector and Skyworks in particular. He is looking for the stock to move much higher.

While the crisis seems to have passed, Mr. Cramer believes it’s important to note how quickly Ben Bernanke went from hero to scapegoat. The volatility of the Federal Reserve chairman’s image is a negative for the stock market. Given the increased volatility in the markets today, Cramer believes that investors should concentrate on the following investing themes.

Foreign stocks
Cramer recommends investors increase their allocation in foreign stocks to 25% of their total portfolio, up from his previous 20% recommendation. Cramer became more bearish on the domestic economy after Congress turned on Fed Chairman Ben Bernanke. Instead, Cramer advised investors to consider Brazil, Canada, Chile and Australia.

Gold
Gold prices have fallen since China decided to “slow things down”. Cramer believes that the correction in gold prices has nearly run its course and his favorite gold pick is SPDR GoldShares (GLD: 108.47 -1.14%). The Mad Money host proclaimed, “gold must be an integral part of your portfolio.”

Mobile Internet Tsunami
Cramer has been a leading fan of the mobile internet revolution and believes that investors should hop onboard the wave. His favorite mobile internet stock is Apple (AAPL: 224.84 +0.82%) which he says is “at the heart of a revolution in how the world gets its information.” Cramer also feels that Apple stock will be immune to further missteps from Washington.

Counter-terrorism
Since America must maintain a strong stance against its enemies, Cramer feels that counter-terrorism stocks like FLIR Systems (FLIR: 26.63 +0.30%) and ArcSight (ARST: 26.39 -0.64%) should benefit. It’s also unlikely that President Obama will target these types of companies.

Oil
America is running out of oil resources and we are unlikely to break out dependence on foreign oil for many years. Cramer recommended Schlumberger (SLB: 64.20 +0.16%) as a great energy stock to own given its strong international presence.