Mid-day Update

S&P 500 1,071.13 -.73%
NASDAQ 1,771.70 -2.05%

Leading Sectors
Broadcasting +1.06%
Drugs +.33%
Airlines -.19%

Lagging Sectors
Networking -2.86%
Disk Drives -3.03%
Computer Boxmakers -3.10%

Other
Crude Oil 45.23 +1.0%
Natural Gas 5.48 -2.39%
Gold 396.70 -.30%
Base Metals 109.11 -.24%
U.S. Dollar 88.85 +.02%
10-Yr. T-note Yield 4.28% +.18%
VIX 18.80 +4.32%
Put/Call .82 unch.
NYSE Arms 1.81 +39.23%

Market Movers
HPQ -16.2% after missing 3Q estimates and lowering 4Q forecast.
CYBX -44.5% after it failed to win U.S. regulatory approval to market its implantable nerve-stimulation device as a treatment for severe depression.
DIGE -34.5% after missing 4Q estimates and lowering 1Q guidance.
MICU +19.2% after announcing positive phase III results for Dalbavancin in skin and soft tissue infections.
WGII +10.0% after beating 2Q estimates.
TGT +6.4% after miss 2Q estimates, but maintaining 3Q guidance.
ANN +6.1% after meeting 2Q estimates and maintaining 3Q and 4Q forecasts.
PBY -25.0% after missing 2Q estimates substantially.

Economic Data
Import Price Index for July rose .2% versus estimates of a .4% rise and a .1% decline in June.
Advance Retail Sales for July rose .7% versus estimates of a 1.2% increase and an upwardly revised .5% decline in June.
Retail Sales Less Autos for July rose .2% versus estimates of a .4% increase and an upwardly revised .3% increase in June.
Initial Jobless Claims for last week fell to 333K versus estimates of 340K and 337K the prior week.
Continuing Claims fell to 2896K versus estimates of 2895K and 2901K prior.
Business Inventories for June rose .9% versus estimates of a .6% rise and an upwardly revised .7% increase in June.

Recommendations
Goldman Sachs reiterated Outperform on MER, CZN and AMD. Citi SmithBarney upgraded TPX to Buy, target $19. Citi said to Buy COGN, target $41. Citi reiterated Buy on AMAT, target $21. Citi reiterated Buy on FD, target $58. UBS raised MAR to Buy, target $57. UBS raised FHR to Buy, target $30.25. RFMD downgraded to Sell at Deutsche Bank, target $3.50. EAT cut to Sector Underperform at CIBC World Markets. KYPH cut to Sell at Bank of America, target $21. EAT cut to Underweight at Prudential, target $32. GET rated Overweight at JP Morgan. ADRX raised to Buy at Merrill Lynch, target $25.

Mid-day News
U.S. stocks are lower mid-day on disappointment over Hewlett Packard's quarterly report and rising oil prices. Russia may announce by early September terms for auctioning exploration licenses for Sukhoi Log, its biggest untapped gold field, with a starting price of at least $250 million, Interfax reported. U.S. National Security Adviser Condoleezza Rice called Dmitry Medvedev, Russian President Putin's chief of staff, to express concern about the country's handling of OAO Yukos Oil and its effect on the oil markets, the Wall Street Journal reported. OAO Yukos Oil's appeal to defer some of its tax payments was rejected by the Moscow Arbitration Court, Interfax reported. IBM plans to hire 18,000 workers in 2004, up from previous estimates of 10,000, Bloomberg reported. California Governor Schwarzenegger said he might campaign out of state for President Bush, the LA Times reported. Wal-Mart said second-quarter profit rose 16%, helped by new stores and sales at international outlets. The company also boosted its annual earnings forecast, Bloomberg reported. The U.S. State Department said that the potential for violence exists in Venezuela where voters go to the polls Sunday to cast ballots in recall referendum on President Chavez, Bloomberg reported. The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, for the second straight decline, Bloomberg said. Hewlett-Packard said third-quarter profit rose to $586 million, less than analysts expected, as sales of its server and storage computers fell, Bloomberg reported. Target said second-quarter earnings almost quadrupled because of a gain from the sale of the company's Marshall Field's chain, Bloomberg reported. U.S. retail sales rose .7% in July after a decrease in June that was less than initially reported, Bloomberg said. Hurricane Charley moved toward the Cayman Islands and Cuba, while Tropical Storm Bonnie weakened as it approached the Florida panhandle this morning, the U.S. National Hurricane Center said. The average rate on a 30-year fixed mortgage in the U.S. fell this week to 5.85%, the seventh decline in eight weeks, Bloomberg reported. Crude oil futures rose to records in New York and London on continuing worries over supply disruptions, Bloomberg reported. Iraqi and U.S.-led coalition forces in Najaf have captured weapons and about 1,200 militiamen as they battle with rebels loyal to cleric al-Sadr for an eighth day, Bloomberg reported.

BOTTOM LINE: The Portfolio is lower today on declines in my internet and computer longs. I have not traded today and the Portfolio is still 75% net long. Another disappointing day for the Bulls as the technology sector takes it on the chin once again. As well, investors remain fixated on oil, notwithstanding another drop today in the CRB Index(a broad measure of commodity prices). The VIX continues to move higher and the Arms is spiking again, which are positives. Stratfor.com, a well-respected global intelligence firm, said on a conference call today that the strategic situation in Iraq is much improved since April. They also believe that if terrorists are to hit domestically, it will occur this month. However, they said the odds of this happening have diminished considerably since August 1st. Finally, they believe there is as much as a $10/bbl. terror premium in oil. I expect U.S. stocks to rise slightly into the close, barring a significant change in oil prices.