Tuesday Close

S&P 500 1,094.83 +.99%
NASDAQ 1,869.10 +1.64%

Leading Sectors
Retail +2.91%
Biotech +2.64%
Telecom +2.41%

Lagging Sectors
Hospitals -.51%
Airlines -.78%
HMO's -4.2%

Other
Crude Oil 41.82 -.05%
Natural Gas 5.98 -.10%
Gold 388.00 +.26%
Base Metals 108.33 -.74%
U.S. Dollar 89.73 +.79%
10-Yr. T-note Yield 4.60% +2.68%
VIX 16.55 -4.34%
Put/Call .72 -12.2%
NYSE Arms .78 -32.76%

After-hours Movers
CREE +6.76% after beating 4Q estimates and raising 1Q guidance.
VRTS +4.10% after beating 2Q estimates and raising 3Q forecast.
ZRAN +10.04% after beating 2Q estimates and raising 3Q/04 outlook.
MFE +7.84% after beating 2Q estimates and raising 3Q guidance.
UTSI -13.4% after missing 2Q forecast and lowering 3Q/04 outlook.
MNST +6.1% after beating 2Q estimates and lowering 3Q outlook.

Recommendations
Goldman Sachs reiterated Attractive view of Paper sector, favorite is IP. Goldman reiterated Outperform on AMGN, ADP, MSFT and GDT.

After-hours News
U.S. stocks finished higher today on better-than-expected economic reports and strong telecom earnings. After the close, Electronic Data Systems, the world's second-biggest computer-services provider, reduced its quarterly dividend to 5 cents a share, Bloomberg reported. Chubb, the second-biggest liability insurer for U.S. corporate boards, said second-quarter profit climbed 41% as premiums and investment income rose, Bloomberg said. New Jersey faces higher borrowing costs after S&P and Fitch cut credit ratings on more than $18 billion in debt, Bloomberg said.

BOTTOM LINE: The Portfolio finished slightly higher today as strength in my biotech, security and technology longs offset my rising retail shorts. I added a few more longs in the afternoon, bringing the Portfolio's market exposure to 100% net long. One of my new longs is ERES and I am using a $22.00 stop-loss on this position. The strength of today's rally was impressive given the extent to which rates rose and oil climbed. The advance/decline line and volume were much improved today as well. Finally, the CRB Index continued its recent slide, breaking down through its 200-day moving-average today, which bodes well for future inflation readings. While the major U.S. averages should continue to rally for awhile longer, recent lows will likely be tested in the coming weeks as investor complacency is still too high for a meaningful bottom.