Tuesday Close

S&P 500 1,140.58 -.58%
NASDAQ 1,995.16 -.68%

Leading Sectors
Foods +.30
Semis +.23%
Telecom -.07%

Lagging Sectors
Papers -1.80%
Airlines -2.73%
Networking -3.60%

Other
Crude Oil 36.36 +.22%
Natural Gas 5.46 +.40%
Gold 403.00 -.37%
Base Metals 106.68 -2.12%
U.S. Dollar 88.43 +.60%
10-Yr. Long-Bond Yield 3.72% -1.25%
VIX 16.60 +5.13%
Put/Call .98 +22.50%
NYSE Arms 2.74 +60.23%

After-hours Movers
RCKY +14.4% after announcing that it will produce 200,000 pairs of combat boots for U.S. Army.
MMSI +5.93% after announcing it will be added to the S&P 600.

Recommendations
Goldman Sachs reiterating Outperform on ADP after NY analyst meeting today. GS initiating coverage on NOC with an Outperform. GS lowering estimates on RTN and lowering rating to Underperform. GS reiterating Outperform on NKE and raising estimates. TheStreet.com says TKLC is a sensible way to play the booming VoIP business.

After-hours News
U.S. stocks fell Tuesday in a wide variety of sectors as investors continue to seek profit-taking opportunities on the heels of the last 12 month's rally. After the close, Procter & Gamble(PG) raised 3Q guidance, raised its dividend and announced a 2-for-1 stock split. Comcast, spurned once in its takeover bid for Disney, will return with a higher offer, President Bob Iger predicted. The war against al-Qaeda and Taliban fighters in Afghanistan is almost over and three-quarters of the country is secure, Reuters said. IBM may lose all or some of its $5B contract with JP Morgan after the bank completes its acquisition of Bank One, Bloomberg reported. Eastman Kodak filed a lawsuit accusing Sony of using its patented technology for digital cameras without permission, Bloomberg reported. U.S. health officials said a Wisconsin state Web site that helps residents order cheap mail-order drugs from Canada is illegal and puts the state at risk for patients' lawsuits. The U.S. Senate defeated an attempt by Democrats to make it tougher to make President Bush's $1.7 trillion tax cut permanent. Eli Lilly said a government probe of its marketing may widen to include its best selling drug, Zyprexa.

BOTTOM LINE: The Portfolio finished the day unchanged, as broad market weakness persisted throughout the day. While the NASDAQ did break the 2000 support level, it was not a convincing break and the relative strength in semis may provide the catalyst for a near-term rally. I took profits in one of my consumer cyclicals and added a semi equipment long on the close, leaving the Portfolio 50% net long. My indicators and analysis are giving conflicting signals, thus I will remain conservatively positioned, with a bias to the long-side, until a more clear resolution to the market's direction is apparent.