Mid-day Update

S&P 500 1,114.11 +.10%
NASDAQ 1,969.28 +.24%

Leading Sectors
Disk Drives +1.48%
Networking +1.17%
Biotech +1.05%

Lagging Sectors
Telecom -1.24%
Oil Service -1.29%
Homebuilders -1.30%

Other
Crude Oil 41.20 +.15%
Natural Gas 6.66 -.36%
Gold 388.00 -.13%
Base Metals 106.71 +1.09%
U.S. Dollar 89.79 -.04%
10-Yr. T-note Yield 4.68% -.67%
VIX 15.92 -.25%
Put/Call .95 +10.47%
NYSE Arms 1.01 +68.33%

Market Movers
TIVO +5.42% after beating 1Q estimates and raising 2Q guidance.
BSX +5.8% after announcing more positive data from its Taxus VI clinical trial.
MAGS +20.25% on continued optimism over a Homeland Security contract.
CPRT +18.58% after beating 3Q estimates substantially.
EYET +15.57% after saying the FDA scheduled a meeting in August to discuss its Macugen treatment for age-related macular degeneration.
FNF +6.96% after saying it filed with the SEC to sell shares of its mortgage-processing and data-services unit to the public and spin it off.
SNIC +10.31% after saying that Toshiba had chosen it to bundle RecordNow! with its entire line of PCs worldwide and to include PrimeTime DVD burning in all of its Windows XP Media Center edition PCs.
APSG +9.69% after beating 2Q estimates substantially.
TSA -4.71% after missing 1Q estimates, but boosting 04 guidance.
DRIV -5.89% after announcing $175 million convertible senior note offering.

Economic Data
Durable Goods Orders for April -2.9% versus expectations of -.9% and +5.7% in March.
Durable Goods Less Transportation for April -2.1% versus expectations of -1.0% and +6.3% in March.
New Home Sales in April were 1093K versus expectations of 1200K and 1239K in March.

Recommendations
BOW raised to Buy at UBS, target $52. AMSG raised to Buy at UBS, target $30. USPI rated Buy at UBS. QLTY raised to Buy at Legg Mason, target $14. UHS rated Outperform at Bear Stearns. Goldman Sachs reiterated Outperform on CLX, IP, WFC, AIG, GDT and EMC. Goldman said cell-tower stocks should continue to move higher as it is becoming increasingly clear that carriers are going to move more aggressively to 3G. Goldman still positive on Gold, target $445/oz next 12 months. Goldman reiterated Underperform on F and VTS. Citi SmithBarney said to Buy YHOO, target $33, ahead of quarterly reported. Citi upgraded LLY to Buy, target $82. Citi reiterated Buy on LXK, target $110. Citi reiterated Buy on CSCO, target $34. Citi reiterated Buy on BEAS, target $13. Citi reiterated Buy on TGT, target $50. Jim Cramer, of TheStreet.com, has a positive column on cable stocks, saying VOIP will make them huge winners.

Mid-day News
U.S. stocks are mixed mid-day as falling interest rates and stabilizing energy prices boost some shares, offsetting fears over holiday terrorism and weaker-than-expected economic reports. Optimism among German exporters rose to the highest since January 2001 in May as growth in the U.S., Asia and Europe boosts foreign demand and a weaker euro makes their goods cheaper abroad, according to a survey by the Ifo economic institute. The U.S. will outline anti-terrorism measures the government is planning after intelligence reports said al-Qaeda may attack on U.S. soil in coming months, Bloomberg reported. GM has added Caterpillar to the list of companies that may buy its locomotive-manufacturing division, the Detroit Free Press reported. Harvey Pitt, former chairman of the SEC, told CNBC that New York Attorney General Eliot Spitzer's lawsuit against Grasso isn't an "effective use of anyone's time," Bloomberg reported. A unit of PetroChina, China's biggest oil producer, found more than 400 million metric tons of crude oil in a deposit in the country's northwestern province of Gansu, China Central TV reported. U.K. Prime Minister Tony Blair said he and U.S. President Bush are "absolutely agreed" that sovereignty in Iraq will be transferred to a new government and coalition troops will remain under U.S. Command, Bloomberg said. U.S. sales of new houses fell 11.8% in April, the biggest monthly drop in more than a decade, as mortgage rates rose and prices soared to a record, Bloomberg reported. Comcast plans to offer digital phone service to almost all its customers by the end of 2006, CEO Brian Roberts said.

BOTTOM LINE: The Portfolio is having a good day today and I have not traded, leaving market exposure at 125% net long. I expect stocks to rise slightly after Ashcroft's speech at 2 est. However, some profit-taking could occur later on before the holiday weekend on terrorism fears. The market is holding up very well today considering the news and yesterday's large gain. I would not want to be short on Tue., barring any significant terror act. Biotechs look like they could outperform over the next week as a major cancer meeting(ASCO) begins June 4th and lasts through June 8th. Positive news should benefit DNA, OSIP, AMGN and ABGX. BBH is a conservative way to play the sector.