Mid-day Update

S&P 500 1,087.65 +.55%
NASDAQ 1,813.26 +1.02%

Leading Sectors
Airlines +3.38%
Disk Drives +3.01%
Networking +1.92%

Lagging Sectors
Telecom -.04%
Defense -.49%
Fashion -.56%

Other
Crude Oil 46.21 -.11%
Natural Gas 5.38 +.13%
Gold 405.00 -.42%
Base Metals 109.93 -.79%
U.S. Dollar 88.24 +.20%
10-Yr. T-note Yield 4.22% +.83%
VIX 16.57 -2.64%
Put/Call 1.0 +7.53%
NYSE Arms .64 -26.44%

Market Movers
NTAP +9.7% after beating 1Q estimates and raising 2Q outlook.
OHB +11.0% after beating 4Q estimates and raising 05 guidance.
ARB +9.7% after raising 3Q and 04 outlook substantially.
MSTR +5.8% after announcing strengthened global alliance with Syntel.
GNTX -7.6% after raising dividend and cutting 3Q outlook.

Economic Data
None of note.

Recommendations
HAL added to JP Morgan's Focus List. DELL rated Outperform at CSFB, target $40. IM rated Outperform at CSFB, target $17. SKS cut to Underweight at Prudential, target $12. MAR rated Focus 1 stock of the week at Merrill Lynch. EL raised to Buy at Bank of America. ASO raised to Strong Buy at Raymond James, target $30. ARTC raised to Buy at Bank of America, target $30. AMT rated Overweight at Morgan Stanley, target $18. TJX cut to Underweight at JP Morgan. Goldman Sachs reiterated Outperform on DOW, IP and PFE. Citi SmithBarney said to Buy FITB ahead of 3Q, target $58. Citi reiterated Buy on AMAT, target $22. Citi reiterated Buy on MO, target $65. Citi reiterated Buy on HAL, target $37. Citi reiterated Buy on BJ, target $30. Citi reiterated Buy on JCP, target $50.

Mid-day News
U.S. stocks are higher mid-day on optimism over corporate earnings and stabilizing energy prices. Deloitte & Touche is being investigated by the governing body for Ontario's accounting industry over Nortel Networks' financial statements, Bloomberg reported. The Swift Boat Veterans for truth tv ad, which says Senator Kerry lied about his war record, has resulted in doubts in 27% of voters who planned or were likely to vote for Kerry, an independent study by HCD Research showed. Chinese Premier Wen Jiabao urged banks to keep up lending curbs aimed at slowing the economy, state-owned China Central Television reported. US Airways Chairman Bronner says no one will be willing to rescue the airline if it files for bankruptcy, the Pittsburgh Post-Gazette reported. The SEC is expected to formally approve Google's IPO today, the Wall Street Journal reported. Iraqi Shiite Muslim cleric al-Sadr agreed that his militia should lay down their arms and quit Najaf's Imam Ali Mosque, acceding to demands from an Iraqi delegation to end an uprising in the city, Reuters reported. Google lowered its IPO price to between $85-95 from $108-135, Bloomberg reported. The SEC ordered mutual funds to stop paying increased commissions to brokers in exchange for promoting the companies' funds, Bloomberg said. Janus Capital agreed to pay $100 million to settle U.S. regulators' allegations that the mutual fund company permitted "market timing," Bloomberg reported. For the first time since the Vietnam era, national security issues are largest concerns than the economy and jobs for U.S. voters, according to a report by the Pew Research Center. Crude oil prices rose after an Energy Department report showed that U.S. refineries boosted their operations and that gasoline demand rose to the highest level this year, Bloomberg reported.

BOTTOM LINE: The Portfolio is substantially higher mid-day as my homebuilding, semi and RFID-related longs are rising and my steel and Chinese ADR shorts are mixed. I added a few new technology longs this morning, bringing the Portfolio's market exposure to 100% net long. One of my new longs is SWIR and I am using a $22.50 stop-loss on the position. It is impressive that the market has sustained today's rally in the face of increasing oil prices this morning. The advance/decline line is strong and the Put/Call ratio is rising, which are also positives. Moreover, Google may have prevented disaster by lowering its offering price, which is good for psychology. I expect stocks to rise modestly in the afternoon.