I'm looking at Novartis (NVS) late in the trading day. There's less than an hour to go before the market closes. The stock is up 0.4% to $50.97. Is it me, or is Wall Street telling us that it isn't too excited by the drug maker's latest earnings report? Which actually wasn't bad, as far as I can tell. Perhaps the market actually is excited, but the response is being muted by the overall tone of the session (volume is strong, I should mention).

The one-year chart for the equity probably wouldn't make you want to buy this one for a trade. It almost seems as if the chance to get in on a great pullback has come and gone, doesn't it? Well, let's have a peek at the fundamentals.

The markets had a relatively flat day to start the week, but there were some big name stocks that traded up to new 52 week highs in today's session. The DOW was up 0.2%, NASDAQ was down 0.01%, while the S&P saw the most change, closing up 0.4%.

Here are a couple of the bigger names that traded up to new 52 week highs in today's trading.

• Intel Corporation (NASDAQ: INTC): Chipmaker Intel Corp. traded up to a new 52 week high today of $20.65. It set its 52 week low of $12.05 back on 2/23/09. The stock is trading higher today ahead of the company's third quarter earnings numbers, which are due out tomorrow following the market close. Analysts are expecting the company to show earnings of 27 cents per share. The company reported a loss of 7 cents per share for its second quarter. The stock closed the day up 1.1% at $20.40, up $0.23 on the day.

In a period of economic distress, owning stocks with stable cash flows is a great way to avoid the carnage found in other parts of the market. One sector traditionally known to provide consistent cash flow to investors is the pharmaceutical industry.

Patent protection on drugs provides the industry with the ability to generate revenue unencumbered by competition. Investors generally pay a premium to own a piece of that stream -- no matter what is happening in the economy.

During the last few years, market premium for drug companies has been diminished. As drugs from the major pharmaceutical makers come off patent, revenues and cash flow suffers.

That fact explains why drug companies invest so much money on research and development. When older drugs come off patent they are replaced by a steady stream of new drugs.

What happens when that pipeline goes dry? Obviously, the company is not worth as much.

That has been the situation at Pfizer (NYSE: PFE). During the last five years, we have been hearing about a dwindling drug pipeline with no sign of abating. During that time, patents for working drugs only aged

Good thing that Zoloft is no longer covered by patent protection. Now it will be a lot cheaper for Pfizer Inc. (NYSE: PFE) investors to stock up on the anti-depressant so they can better cope with the drug maker's lousy earnings.

Net income in the second quarter plunged 48% to $1.27 billion, or $0.18 per share, on revenue of $10.11 billion. Excluding unpleasant stuff like restructuring charges, profit was $0.42. On that basis, Wall Street analysts expected profit of $0.50 on revenue of $11.4 billion, according to Thomson Financial.

Investors could take some solace knowing that the company doesn't think things will get much worse. It reaffirmed EPS and revenue guidance for 2007 and 2008. Good thing, too, since the company just cut its 2007 outlook in April.

Still, there wasn't much to cheer about in today's results. Sales of Lipitor, the company's most prescribed product, plunged 13% in the quarter, failing to meet Pfizer's own expectations. Zoloft sales plunged 82% while NORVASC fell 45% and Viagra fell 3%.

Investors expected sales of these drugs to plunge since they lost patent protection. Chief Executive Jeffrey Kindler has cut jobs and closed factories to cut costs. But what the company needs more than anything are new best selling drugs.

Like the minor league system in baseball, drug companies count on their pipelines to replace aging players. Whether investors will give Pfizer enough time to develop its prospects is far from certain.

Drug manufacturer Eli Lilly & Co. (NYSE: LLY) has got serious problems that go beyond its lackluster first quarter earnings.

During the first quarter.profit fell 39%, despite the fact that revenues rose 14%.. In spite of the fall-off in profits, management has raised full-year sales projections, and expects earnings of $2.63-$2.73 for the year. But that's only part of the story.

Eli Lilly recently yanked its European application to sell Arxxant, a drug to reduce diabetes-related eye diseases. Scaling back additional European operations incurred charges of $0.08 per share. Lilly still faces more than 1,000 lawsuits related to use of its antipsychotic drug Zyprexa. The legal bill for this drug has already surpassed the $1 billion mark. The end is not yet in sight as Lilly continues to sell the drug in selected markets.

Additional worrisome news is that Lilly does not have a robust drug pipeline. There aren't many drugs in advanced stages of the approval process. Its next big drug to market might be prasugrel, useful in treating heart disease. This drug is only in preliminary trials.

Lilly figures if it cannot produce its own drugs, it can acquire them from others. Lilly bought Icos Corporation in 1Q 2007 for $2.3 billion, $0.29 per share in charges. It is too soon to tell whether this acquisition was a bargain or an additional liability.

In what may be a snapshot of modern American society, two of Eli Lilly's top selling drugs are Cymbalta, used to treat anxiety disorder, and Cialis, used to treat erectile dysfunction. Sales of the anti-depressant Cymbalta rose 89% to $441.8 million. Sales of Cialis were up 19% to $265.8 million for the quarter.

Merck & Co. (NYSE:MRK) fourth-quarter results could have been much worse. Instead they may indicate that there is some hope for the drug maker to improve its results despite the huge liability it faces because of Vioxx and the expiration of the patent on Zocor, which had been its top seller.

Net income plunged to $473.9 million, or 22 cents per share, versus $1.12 billion, or 51 cents, a year earlier. Revenue jumped 4.8 percent. to $6.04 billion, boosted by strong sales of allergy and asthma. Excluding charges, profit was 50 cents, matching the consensus forecasts. Wall Street was expecting revenue of $5.37 billion. It repeated guidance for the year of $2.51 to $2.59 per share.

A potential bright spot for the Whitehouse New Jersey-based company may be in its $1.1 billion purchase of the biotech firm Sirna. WBB Securities analyst Steve Brozak told the Associated Press that "If it harms this quarter or next quarter, that is not a big deal."

Increased sales of drugs such as Singulair and Vytorin along with gains in the vaccine business softened the blow from the drop off in Zocor revenue.

The company has raised its earnings forecasts three times last year and investors are expecting it to happen again. Merck's shares barely moved after the earnings were issued yesterday. Considering all of the challenges this company is facing, that's saying something.

Also check out some other earnings reports that we're following, and let us know what you're expecting.

Pfizer Inc. (NYSE:PFE) rolled with the punches in the fourth quarter, delivering results that beat Wall Street forecasts by one penny. Still, the drugmaker is far from out of the woods.

The drugmaker said fourth quarter earnings were $9.45 billion, or $1.32 per share, versus $2.73 billion, or 37 cents per share, a year earlier, buoyed by the sale of its consumer business to Johnson & Johnson (NYSE:JNJ) . Excluding some costs, profit was 43 cents, beating the 42-cent average estimate of analysts polled by Thomson Financial. Revenue was $12.66 billion little changed from a year earlier.

Sales the anti-cholesterol drug Lipitor, which Bloomberg News says accounts for almost half the company's profit, fell to $3.34 billion. Sales of the anti-depressant Zoloft also fell because it's no competing against lower-cost generics.

Investors were relieved that the numbers weren't any worse and sent the stock up in pre-market trading.

"In the face of many challenges in 2006, we substantially achieved a number of financial targets that we set early in the year," said Pfizer Chairman and Chief Executive Officer Jeffrey B. Kindler in a press release. The company added that it achieved its full-year financial goals including earnings per share of $2.06.

Wall Street is split about the prospects of the New York-based drugmaker.

Eight analysts rate the stock either a strong buy or a buy. Fifteen consider it a hold and one a sell, according to Thomson Financial. Their median target price is $28.

Kindler is expected to announce details of a cost-cutting plan for the company, which could involve several thousand job cuts and a new development and marketing plan, according to the Wall Street Journal. (subscription required). Investors are also awaiting word on the company's 2007 forecast.

Also check out some other earnings reports that we're following, and let us know your thoughts on earnings expectations.