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Two Ways To Play: Brewing Intimacy At Starbucks

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Strengthen your portfolio in good times and bad.

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Starbucks Going with More Face Time

The Wall Street Journal reports Starbucks (SBUX) will change its store- worker scheduling system so that fewer employees will work more hours at its coffee shops.

The program is aimed at reducing the company's labor expenses and improve revenues by fostering familiarity between customers and a smaller number of employees. Other companies have made similar small-box retailing moves in recent weeks - and Starbucks introduced this program a week ago as part of its broader restructuring effort. Scott Reeves wrote about this strategy on August 27th.

From the Bull Pen: The better upside play may be in Panera Bread (PNRA). Bulls can consider the upside if the stock can hold $45 support. Sell stops can be set below that level.

From the Bear Cave: The downside trade in Starbucks may be over. A better downside play could be in Yum! Brands (YUM) near $34, if and when it reaches that level.


Lilly for Imclone


Bloomberg reports Eli Lilly (LLY) has agreed to buy ImClone (IMCL) for $6.5 billion, topping Bristol-Myers Squibb's (BMY) $62 per share hostile bid in July. Investors in Imclone will get $70 per share, marking a 51% increase over the Bristol-Meyers' offer.

The transaction isn't subject to any financing conditions and is expected to close in late 2008 or early 2009. Lilly will incur a one-time charge to earnings for acquired in-process research and development. Lilly also sees the deal adding cash basis in 2012.

From the Bull Pen: A stock with some upside may be Biogen (BIIB). Sell stops can be set near $48. Another option is to use the biotech ETF (IBB). Sell stops can be set below $75.

From the Bear Cave: We've mentioned an upside play in Pfizer (PFE) recently. But the stock is coming close to $20 resistance. Bears can attempt the downside in the stock if the stock fails at that level.

For more ideas in real time throughout the trading day, check out Minyanville's Buzz & Banter.


Quick Check Around the World

Asian trading closed with the Hang Seng -4.97%, Nikkei -4.25%, Sensex -5.78%, Taiwan -4.12% and Shanghai -5.23%.

Quickly glancing towards Europe, we see the CAC -5.59%, DAX -5.09%, FTSE -4.91%

As of 8:40 a.m. EST, S&P Futures are trading -24 points to 1083 and Nasdaq futures are -31 points to 1446.


A Look At Commodities

Commodities are mixed. Crude oil is trading -3.90 to 89.98. Gold is +27.30 to 856.20. Silver +0.7830 to 11.410, and copper -12.15 to 258.35.

The dollar index is +0.797 to 81.118.

Nothing on the radar today, but click here to see the rest of this week's events.

Good luck and have a great week!

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No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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