Mid-day Update

S&P 500 1,100.47 +.46%
NASDAQ 1,879.44 +1.14%

Leading Sectors
HMO's +3.66%
Airlines +3.41%
Semis +3.22%

Lagging Sectors
Consumer -.31%
Foods -.32%
Iron/Steel -3.74%

Other
Crude Oil 42.72 -.42%
Natural Gas 6.19 +.78%
Gold 390.30 -.38%
Base Metals 110.86 +.70%
U.S. Dollar 89.90 +.17%
10-Yr. T-note Yield 4.57% -.35%
VIX 15.71 -2.72%
Put/Call .63 -5.97%
NYSE Arms .94 -15.18%

Market Movers
ESRX -11.9% after the company said 19 states are investigating its business practices.
CCE -15.5% after missing 2Q estimates and giving weak guidance.
MVL -14.3% after beating 2Q estimates and giving weaker guidance.
TARO -22.6% after disappointing 2Q results.
INSP +28.5% after substantially beating 2Q estimates, raising 3Q/04 guidance and multiple upgrades.
SFNT +21.7% after beating 2Q estimates and raising 3Q/04 outlook.
ALDA +21.3% after better-than-expected 2Q.
OCLR +19.3% after announcing it is being acquired by COO for about $1.2B.
LAVA +21.8% after beating 1Q estimates, raising 2Q guidance and authorizing 1M share buyback.
PRX +17.7% on better-than-expected 2Q.
EQIX +13.2% after beating 2Q estimates and raising 3Q guidance.
BC +10.5% after beating 2Q estimates and raising 3Q forecast.
KKD -10.8% after saying the SEC is investigating how the company accounted for the repurchase of franchises and earnings forecasts.
FCN -10.6% after meeting 2Q estimates, but lowering 3Q/04 outlook.
ULBI -18.4% on profit-taking after beating 2Q estimates and maintaining 04 outlook.

Economic Data
2Q Employment Cost Index rose .9% versus expectations of a .9% rise and a 1.1% rise in 1Q.
Initial Jobless Claims last week rose to 345K versus estimates of 340K and an upwardly revised 341K prior week.
Continuing Claims were 2960K versus estimates of 2875K and a downwardly revised 2786K prior.
Help Wanted Index for June was 38 versus estimates of 40 and a reading of 39 in May.

Recommendations
Goldman Sachs reiterated Underperform on KMG, CAN, BMY, MKL, LVLT, TCO, EDS and GSIC. Goldman reiterated Outperform on NEM, ISG, BC, BHI, CMX, MDT, GDT, SPG and BIIB. Goldman's IT survey leads them to believe a trading bottom is near in tech. Goldman downgraded GM to Underperform. Citi SmithBarney said to Buy RJR now, target $77. Citi reiterated Buy on TYC, target $38. Citi reiterated Buy on IGT, target $50. Citi reiterated Buy on RCL, target $52. Citi reiterated Buy on EEFT, target $23. Citi reiterated Buy on CAM, target $63. Citi reiterated Buy on APD, target $57. Citi reiterated Buy on RSG, target $35. Citi reiterated Buy on SRCL, target $56. Citi reiterated Buy on QSFT, target $16. Citi reiterated Buy on WFR, target $14. Citi reiterated Buy on ACLS, target $15. Citi reiterated Buy on NEM, target $50. Citi reiterated Buy on SSI, target $54. CENX raised to Overweight at JP Morgan. BLDP raised to Buy at UBS, target $9. YHOO rated Sector Outperform at CIBC, target $36. IBM rated Outperform at CSFB, target $100. GPS rated Outperform at CSFB, target $27. GTK cut to Underperform at Morgan Stanley. NILE raised to Outperform at Bear Stearns, target $37.

Mid-day News
U.S. stocks are rising mid-day on strength in technology shares, stronger earnings reports and a slight decline in oil prices. Apria Healthcare(AHC), which provides respiratory therapy and home medical equipment, is considering a sale of the company, the NY Post reported. China imported 2.08 million tons of flat steel products in June, or 35% less than a year ago, the Tex Report said. Canada stepped up security at the U.S. border, searching travelers leaving the country over concern about the possibility of a terrorist attack on the Democratic Convention, the National Post reported. Two computer glitches at CIBC led to account errors for more than 66,000 clients at Canada's third-largest bank, the Toronto Star reported. California Pizza Kitchen founders Rosenfield and Flax, who regained control of the pizza chain a year ago, plan to open new outlets and will redesign stores to attract bigger dinner crowds, the LA Times reported. The Saudi Arabian government agreed to give $1 billion in aid to Iraq, Sky News said. LA County property assessments rose 7.6% in 2003 to a record high of $781 billion as of Jan. 1, the LA Times reported. Fortune Brands's Jim Beam unit and Starbucks will introduce next week a liqueur combining the companies' bourbon and coffee, the Rocky Mountain News reported. California's Fremont Police Dept. is acquiring stun guns made by Taser, and expects the weapons to be in use by Sept., the San Jose Mercury News reported. Crude oil prices are falling after Russia's Justice Ministry said OAO Yukos Oil can keep producing and selling oil, Bloomberg reported.

BOTTOM LINE: The Portfolio is substantially higher today on strength in my technology longs. I added a few new longs this morning, bringing the Portfolio's market exposure to 125% net long. One of my new longs is ANDW and I am keeping a $10.25 stop-loss on this position. I expect U.S. stocks to remain near current levels into the afternoon. However, tomorrow should see another positive day with the end of the Democratic Convention without terror attacks, better-than-expected economic reports and short-covering.