Mid-day Update

S&P 500 1,096.20 +.64%
NASDAQ 1,909.55 +.68%

Leading Sectors
Airlines +2.31%
Homebuilders +2.0%
Iron/Steel +1.99%

Lagging Sectors
Energy -.15%
Oil Service -.64%
Fashion -.70%

Other
Crude Oil 39.82 -2.40%
Natural Gas 6.31 -.22%
Gold 385.70 +1.90%
Base Metals 104.99 +2.39%
U.S. Dollar 90.50 +.58%
10-Yr. T-note Yield 4.75% +1.09%
VIX 18.20 -2.52%
Put/Call 1.19 -.83%
NYSE Arms .78 -55.93%

Market Movers
MRVL +8.5% after beating 1Q estimates.
WM +6.81% on rumors of acquisition by HSBC or Citigroup.
SRNA +15.6% after beating 1Q estimates and raising 2Q guidance.
IHI +12.29% after confirming rumors that it is evaluating strategic alternatives to increase shareholder value, including a possible sale or recapitalization of the company.
PD +4.8% after copper futures rose to a 2-week high on concern about possible disruptions at a Quebec refinery run by Noranda, Canada's largest mining co.
UTEK -11.2% after lowering 2Q guidance and widening 04 forecast.
CSGS -5.83% after announcing that its COO and President of Global Software Services are leaving.

Economic Data
None of note.

Recommendations
CIEN cut to Reduce at UBS, target $2.50. MWD raised to Sector Outperform at CIBC. KFT raised to Outperform at CSFB, target $34. QSFT rated Buy at Bank of America, target $16. ESV raised to Outperform at CSFB, target $35. GS rated Outperform at CSFB, target $36. RSE rated Overweight at Prudential. ENR cut to Underweight at Prudential. CNXT rated Overweight at Morgan Stanley. Goldman reiterated Outperform on AFL and MRVL. Goldman boosted Lodging sector to Attractive, favorites are MAR and HLT. Goldman raised HOT to Outperform. Goldman reiterated Underperform on CIEN, RKY and TLAB. Goldman still likes Gold sector, favorites are NEM and PDG. Citi SmithBarney raised TLAB to Buy, target $11. Citi reiterated Buy on AAP, target $50. Citi reiterated Buy on EEFT, target $26. Citi reiterated Sell on TSS, target $20.

Mid-day News
U.S. stocks are higher mid-day on falling energy prices and strength in cyclical shares. Pakistan would consider sending troops to aid Iraq once it is free from U.S. control, the Washington Times reported. Video footage of beatings, forced amputations and beheadings during the rein of Saddam Hussein were released this week to contrast the images with abuses by the American military, Bloomberg reported. U.S. Marines and Navy Seabees want to hire Iraqis to repair and renovate mosques, as a means of proving the war in Iraq isn't targeting the Islamic religion, the LA Times reported. Pimco's Robert Arnott said on CNBC that he is investing in REITs and short-term bonds. SBC Communications enlisted managers and hired retirees to field customer calls, fix broken lines and handle other vacant jobs as 100,00 workers began a four-day strike, Bloomberg reported. Saudi Arabia said it will propose that OPEC increase its oil-production quota by more than 2 million barrels a day, Bloomberg said. Florida, Michigan and Ohio, states that may have the closest contests in the presidential election, gained 52,600 jobs last month, Bloomberg reported. The benchmark 10-yr. T-note is headed for its biggest weekly gain since March after comments by Fed policy makers raised optimism the central bank will be able to contain inflation, Bloomberg said.

BOTTOM LINE: The Portfolio is having another good day today as a couple of my airline and Chinese ADRs are rising substantially. I have not traded today and the Portfolio is still 100% net long. I think U.S. stocks will trade neutral to higher into the afternoon on a continuing drop in oil prices. An unexpected rally in bonds this afternoon could lead to a more significant stock rally.