Daily Stock Pick of the Day - Wed., Sept 29, 2010

Stocks glided into gains on Tuesday as investors expected the Fed to pump more money into the economy which put a positive spin on equities.  After declining more than 80 points early in the session, the Dow closed up 46 points at 10,858 .  The S&P 500 and the Nasdaq also closed higher.  The S&P tacked on 5.5 points to close at 1,147.  The Nasdaq added 9 points and closed at 2,379.  Rising sectors included health care, consumer goods and energy.  Telecom and materials fell. 

Names in the news included:  Endo Pharmaceuticals (ENDP), up 8% on word the announcement that it will buy private generics maker Qualitest Pharmaceuticals in a deal valued at $1.2 billion.  Oddly enough, even Pfizer (PFE) rose 1.5% on news that they discontinued a late-stage study on one of their drugs, Sutent, designed to fight prostrate cancer. 

In economic news, the consumer confidence index fell to 48.5 in September from 53.2 in August.  Analysts were expecting this number to come in around 52.5.  This decline marks the lowest reading since February of this year.  Home prices rose in July compared to June, according to Case/Shiller.  By their records, the 10 major metro areas rose .8% from June and their 20-city index rose .6%. 

The stock pick today is Starbucks (SBUX).  Full disclosure here, I'm a fan, but not a shareholder.  Although as regular patron, I did not like the news heralding a rising price of a cup of java at their store, as an investor, I definitely appreciate it.  The cost of coffee beans is on the rise (take a look at the coffee futures) and java roasters like Starbucks are experiencing a rise in the unroasted coffee bean this year.  It's only a matter of time before java drinkers in the nation will be feeling the price pinch for their favorite blend.  Starbucks is also considering raising the price of their packaged coffee that goes to the retail channels (grocery stores, super-marts, etc).  Starbucks closed virtually unchanged today at $26.14 and I like it here.  It's currently in a channel between $24 and $26 and if it can push higher with the September rally, I think Starbucks will rise to about $28.

Coming up on Wednesday, we'll get the reading on the weekly mortgage applications and oil inventories.  On Thursday, expect the weekly jobless claims and GDP results.

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