Mid-day Update

S&P 500 1,116.67 +.16%
NASDAQ 1,972.22 -.20%

Leading Sectors
Iron/Steel +1.38%
Wireless +1.09%
Fashion +.98%

Lagging Sectors
Disk Drives -1.04%
Energy -1.44%
Oil Service -2.22%

Other
Crude Oil 39.62 -2.65%
Natural Gas 6.59 -2.11%
Gold 394.50 +1.60%
Base Metals 107.60 +.83%
U.S. Dollar 88.74 -1.17%
10-Yr. T-note Yield 4.59% -1.31%
VIX 15.77 -1.25%
Put/Call .98 -2.0%
NYSE Arms .97 -13.39%

Market Movers
SEBL +7.83% on circulation of an IDC research report that says sales of CRM software subscriptions are expected to rise 16.6% annually through 2008.
NAVR +14.1% on strong 4Q results and 05 outlook.
MIK +8.8% after beating 1Q earnings estimates, raising 04 guidance and multiple upgrades.
TECD +10.2% after beating 1Q estimates substantially, raising 2Q guidance and Raymond James upgrade to Strong Buy.
DLTR +8.78% after beating 1Q estimate and re-affirming 2Q/04 forecast.
MANT -30.3% after lowering 2Q and 04 forecast.
STAR -12.4% after cutting 2Q forecast on higher boxed beef prices.
CAI -10.3% after disclosing the U.S. government is investigating whether its interrogators broke the rules in Iraq.

Economic Data
Preliminary 1Q GDP came in at 4.4% versus expectations of 4.5% and 4.2% prior.
Preliminary 1Q Personal Consumption was 3.9%, meeting expectations and up from 3.8% prior.
Preliminary 1Q GDP Price Deflator was 2.6% versus expectations of 2.5% and 2.5% prior.
Initial Jobless Claims for last week were 344K versus expectations of 335K and 347K prior week.
Continuing Claims 2948K versus 2923K estimate and 2929K prior.

Recommendations
KO raised to Buy at UBS. ATVI rated Buy at Wells Fargo. JDAS raised to Sector Outperform at CIBC, target $16. VAST cut to Sector Underperform at CIBC. AM rated Overweight at JP Morgan. PRU raised to Overweight at Morgan Stanley, target $52. CTS rated Outperform at Thomas Weisel. FRX raised to Outperform at Thomas Weisel. XPRT raised to Buy at Legg Mason, target $23. MLNM raised to Buy at Deutsche Bank. KSS raised to Buy at Bank of America, target $55. WDC rated Outperform at CSFB, target $12. BBT cut to Underperform at Bear Stearns. BCII rated Outperform at Bear Stearns. TECD raised to Strong Buy at Raymond James, target $48. Goldman reiterated Outperform on BSX, GDT, MDT, TYC, HOT, XOM and ENH. Citi SmithBarney said that managements from AV, JNPR and EXTR appeared confident about 2Q business on their West Coast Data Networking Bus Tour. Citi came away from TLAB investor day thinking the position of its core biz is not as tenuous as once believed and that its revenue and cost synergy guidance from the AFCI purchase was conservative across the board. Citi upgraded AZO to Buy, target $98. Citi reiterated Buy on MER, target $80. Citi reiterated Buy on CELG, target $75. Citi rated AMLN, target $31. Citi reiterated Buy on GTIV, target $22. Citi reiterated Buy on VIAB, target $54. Citi reiterated Buy on TLAB, target $11. Citi reiterated Sell on TECD, target $36.

Mid-day News
U.S. stocks are mixed mid-day as falling energy prices and interest rates are offset by terror concerns and weaker-than-expected economic data. Wall Street underwriters' price cuts on recent initial public share offerings reflect weakness in the IPO market, the Wall Street Journal reported. U.S. health insurance premiums may increase at a slower rate this year as few people are hospitalized or are prescribed expensive drugs, the New York Times said. An al-Qaeda leader in Saudi Arabia today called for a guerrilla war in the kingdom's cities as part of a campaign against the country's royal family, Reuters reported. Senator Kerry is being challenged by an increasing number of Democrats who are calling for the U.S. to set a deadline to withdraw troops from Iraq, the LA Times reported. California lawmakers have approved several bills this week that sanction importing drugs from Canada, the LA Times reported. Crude oil futures fell for a third day in London on expectations OPEC will raise production quotas next week to lower prices, Bloomberg said. The U.S. economy grew a brisk 4.4% in the first quarter as businesses replenished inventories, government spending rose and home construction accelerated. Corporate profits jumped 31.6% in the year ended in March, the biggest increase since the first quarter of 1984, Bloomberg reported. The personal consumption expenditures price index excluding food and energy, a favorite Greenspan inflation indicator, rose a less-than-expected 1.7%.

BOTTOM LINE: The Portfolio is down slightly today on weakness in my tech long positions. I have not traded and the Portfolio is still 125% net long. I expect stock gains to remain subdued today, as nervousness over a weekend terror attack persists. I believe the recent fall in interest rates and oil will provide the catalysts for another upward move in the major U.S. indices next week. As investors focus more on skyrocketing corporate profits and less on inflation, stocks should benefit.