Daily Stock Pick of the Day, Wed., Oct 13, 2010

After spending most of the day in negative territory, stocks climbed back to positive territory after the Fed released its minutes from their most recent session which state "some accomodation may be appropriate before long."  Yes, quantitative easing, or "QE2" as it's called, is closer to being a certainty.  The question now is how much of the long-term Treasury debt will they purchase?

The Dow rose 10 points, or 0.1%, to 11,020, to close above 11,000, a five-month high.

The S&P rose 4 points, or 0.4%, to 1,169, while the Nasdaq rose 15 points, or 0.7%, to 2,417. Both indexes reached their highest levels since May 12.  The volatility index fell below 19.

Most of the key S&P 500 sectors rose, led by financials, technology and materials.

In economic news, the Conference Board's Employment Trends Index fell to 97.0 in September from their revised 97.3 in August.  This is considered as a sign that job growth will remain sluggish.

Also, a survey released by the National Federation of Independent Business (small business owners)showed they were slightly more optimistic in September.  However, more small business owners plan to cut jobs than hire new workers -- not a good sign.  The NIFB optimism index edged up 0.2 points to 89.0.

The stock I'm looking at today is Netgear (NTGR).  This is a play in the tech space and I still like the prospects many tech companies offer in terms of earnings growth.  For the forseeable future, companies are going to continue to try and get by with less, and tech companies like Netgear will help them do that.  They design, develop and market networking products for home and small businesses.  It closed today at $27.39 and it looks like it may pull back here, hopefully, on low volume.  The $26-$27 range makes a good accumulation range and if it can clear $28, I think it can break to the $30 range. 

Speaking of technology, third quarter earnings season gets underway today.  Intel (INTC) reports this afternoon and I think it will have some impact on the current trading environment.  Intel is a "bellweather" tech stock and a lot can be gleaned from them about the future of tech spending/upgrades they're expecting from businesses across the country. 

I wrote a few weeks ago about Starbucks (SBUX).  Today, SBUX closed at $27.12, up more than 4% today, after an analyst reported that Starbucks' consumer products business, led mostly by their instant coffee mix Via, will boost their sales growth in the coming year.  I'm expecting SBUX to test it's recent high in the $28 range as a result of today's trading activity.

As always, stay cautious and happy trading!  Check out Wall Street Survivor below and get in on the fun!  No risk! 

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