Well..you would need to make the crane a movie clip obviously and attach it to the mouse X property. That way it will only go back and forth, and not up and down.
You will need to set your boundaries on each side so it doesnt go off the screen.
As for the crane dropping, you would probably need a long movie clip that reacts to a mouse button down key. Once the mouse down is clicked, the movie clip drops down to the area straight below it and it would need to have a claw on the ens that animates, doing a closing animation.
You will need to have this claw as a movie clip that will be doing a hit test to any of the objects in the immediate area. If the hit test is true, when the claw closes, you will make whatever object the claw hit ( it will need to be a movie clip too) follow the claw movie clips x and y coords.
Once the hit test returns true or false, you will want to make the claw raise back up and then have the crane roll over to the far right of far left and once it gets to that point, you will need an if statement saying something like, if the claw hit test is true, open claw and drop prize into a prize chute for the winner. If no hit test is detected, then game is over, please insert coin.
Thats a very basic explanation without any of the actual code, but those are the parts you will need to break down and figure out.
Good luck with it.