Mid-day Update

S&P 500 1,156.86+.96%
NASDAQ 2,079.13+1.25%

Leading Sectors
Wireless+3.72%
Iron/Steel+3.08%
Homebuilders+2.55%

Lagging Sectors
Fashion+.07%
Drugs+.44%
Transports-.26%

Other
Crude Oil 34.62+.17%
Natural Gas 5.31-3.81%
Gold 416.70+1.44%
Copper 129.9+4.46%

Market Movers
AWE+15.7% on Cingular's $41B takeover bid.
NXTL+6.2% on AWE news and anticipation of strong earnings report.
RTRSY+20.2% on strong earnings and raised guidance.
IDXC+9.2% on Suntrust and Maxim upgrades to "Strong Buy".
SLAB-5.6% on Morgan Stanley downgrade to "Equal-weight".
OMC-2.2% on earnings report that disappointed some.
DE+4.7% on significantly better-than-expected 1st Q earnings and raised guidance.

Recommendations
Morgan Stanley positive on large-cap integrated oil-service companies. INTC developer forum Feb.17-19 is being watched closely. Goldman Sachs has positive comments on AZO. Goldman also saying Oil/E&P shares can rally to peak valuations, up 30% from current levels, and AMAT quarterly report should be VERY strong. Finally, Goldman likes cell-tower stocks as consolidation news is now out. Citigroup raised estimates for Samsung. Also said prices for power amps and linear IC's have risen 80% and 60%, respectively at TXN and NSM. NSM says 6-inch fabs running at full capacity and TXN has extended lead-times to 12-16 weeks from 6-8 weeks. Citigroup says SEBL favorite play on applications recovery. OSI raised to "Buy" at BB&T Capital. CIEN raised to "Buy" at W.R. Hambrecht. UNA raised to "Buy" at Robert Baird.

Mid-day News
U.S. stocks advanced on optimism an increase in mergers is a sign that shares are cheap even after an 11-month rally and corporate profits will keep rising. The Empire Manufacturing reading came in at 42.05, higher than the 37.0 estimates. Industrial Production met expectations, rising .8%. Capacity Utilization rose to 76.2%, modestly below expectations of 76.4%. Foreigners purchases of U.S. debt, corporate bonds and stocks rose by a net $75B in Dec., dispelling the notion that the falling U.S. dollar and larger budget/trade deficits are hurting demand for U.S. assets. Moreover, the report showed foreigners added 23% to their net holdings of U.S. securities for all of 2003. National City agreed to buy Provident Financial for $2.1B.

BOTTOM LINE: A very good day. Only one sector I follow is down today. However, my short-term indicators are still giving sell signals on the NASDAQ and the technology sector, but buys in many other sectors and the broad market. Thus, I have taken my market exposure back to 100%, adding new positions in a variety of sectors, excluding technology.