Coffee Stocks See Cartoonish Gains as Market Rises

Posted by: Greg T. Spielberg on July 31

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There’s a common phrase these days in media circles: “Even is the new up.” In other words, as businesses pull ads like Bugs Bunny pulls stunts, companies are okay with flat revenue.

So it goes with America’s economy. GDP growth fell only 1% this quarter after plummeting like an anvil, 6.4%, the quarter before. Some experts see this as a sign that our economy has hit the flat part of the pendulum and may be coming back up. BusinessWeek writer Jim Cooper notes that consumer demand is overpowering present inventory, a recipe that should equate to increased third-quarter production.

Traders saw the GDP’s flattening fall as a sign of good news too, helping boost the Dow up another 17 points to 9,172. If you’re looking for the brightest light within the market, BW’s Ben Steverman reports that coffee companies are realizing caffeinated stock earnings. Diedrich Coffee (DDRX) stock has been just cartoonishly silly, rising more than 6,000% — to $23.77 — since the beginning of 2009. Bigger players like Starbucks (SBUX) and Caribou (CBOU) gained 87% and 311%, respectively, since the end of 2008.

BusinessWeek/YouGov’s Optimism Index saw gains as well, albeit smaller ones. Respondents are more confident that the economy is getting better and the index saw a 4% uptick in those who think the stock market will be higher a year from now.

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BusinessWeek’s Joe Weber, Patricia O'Connell, Michelle Conlin, Frederik Balfour, Peter Coy, Greg Spielberg and Roger Crockett examine The Case for Optimism by looking past the financial turmoil and economic unrest gripping the globe to focus on the promising future that lies on the other side of this storm. We’ll chronicle the forward thinkers investing in R&D, launching promising new products, entering new markets, or implementing management and leadership.

See why BusinessWeek Editor-In-Chief Stephen J. Adler is optimistic about the economy amid the sharpest downturn since the Great Depression.

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