Mid-day Update

S&P 500 1,098.26 -.01%
NASDAQ 1,841.82 +.21%

Leading Sectors
Fashion +2.30%
Semis +1.51%
Wireless +.90%

Lagging Sectors
Broadcasting -1.51%
Commodity -1.53%
Iron/Steel -1.95%

Other
Crude Oil 46.60 -.30%
Natural Gas 5.37 -3.19%
Gold 412.70 -.67%
Base Metals 108.91 -1.66%
U.S. Dollar 88.78 +.75%
10-Yr. T-note Yield 4.27% +.92%
VIX 16.02 +.06%
Put/Call .76 -20.83%
NYSE Arms .82 +24.24%

Market Movers
GOOG +3.7% on continuing strong demand for its IPO.
ARTI +15.4% after ARMHY agreed to buy it for about $913 million. ARMHY -18.15%.
MOND +12.3% after it said it would eliminate its class B shares as part of a reincorporation, approving a $30 million stock repurchase plan and Prudential upgrade to Overweight.
FILE +8.4% after KeyBanc upgrade to Buy.
EYET +4.58% on optimism over an upcoming FDA review of Macugen, the company's experimental drug intended to treat an eye disease that is one of the leading causes of blindness.
SCST -26.4% after cutting 3Q outlook.

Economic Data
None of note.

Recommendations
Goldman Sachs reiterated Outperform on A, JTX, WMT and PG. Goldman reiterated Underperform on HRB, TSG and BA. Citi SmithBarney reiterated Buy on UNM, target $20. Citi reiterated Buy on DPZ, target $18. RHI cut to Reduce at UBS, target $21. Bear Stearns raised Hospital stocks to Overweight. PBG cut to Underweight at Prudential, target $25. MOND raised to Overweight at Prudential, target $44. DPZ raised to Outperform at CSFB, target $17. BLS cut to Underperform at Raymond James. SBC raised to Outperform at Raymond James, target $28. MDCC raised to Outperform at Thomas Weisel.

Mid-day News
U.S. stocks are mixed mid-day as interest rates rise, oil stabilizes and earnings reports are mixed. Boeing and IPass are combining services to allow corporate travelers on long-distance flights to connect to the Internet, Reuters said. Comcast plans to offer a digital video recorder service beginning today that will enable viewers to record their shows without a videocassette recorder, the Star-Ledger reported. Sharp Corp. said it has created a microwave oven that can melt some of the fat and oil from steak, chicken, fish and other foods, Reuters reported. Infineon Technologies AG, Europe's second-largest chipmaker, plans to expand in the U.S. by bolstering its business for memory chips there, Die Welt reported. Norway's $140 billion Petroleum Fund hired Fidelity Investments, T. Rowe Price Group, Alliance Capital Management and three other companies to oversee stocks after investments stagnated in the second quarter, Bloomberg reported. Wal-Mart cut its August forecast for sales due to weaker-than-expected back-to-school demand, Bloomberg said. OAO Yukos Oil, Russia's biggest oil exporter, cut its 2004 production target to 1.72 million barrels a day of crude because payments on the company's tax bill forced it to spend less on drilling and maintaining wells, Bloomberg reported. FedEx raised its earnings estimates for a second time this fiscal year because of rising international and ground business, Bloomberg reported. RCN, a provider of cable tv, phone and Internet service, filed a plan to exit bankruptcy that will exchange $1.2 billion in unsecured debt for all of the equity in the company by the end of the year, Bloomberg said. Oil futures fell modestly after Iraq boosted shipments to tankers to normal rates for the first time in two weeks, Bloomberg reported. Merrill Lynch and UBS are among the Wall Street firms which together are losing some of the wealthiest Americans as clients, a group that pays as much as $28 billion in fees for financial advice every year, Bloomberg said.

BOTTOM LINE: The Portfolio is substantially higher mid-day as my homebuilding, internet, alternative energy and telecom equipment longs are rising and my Chinese ADR and steel shorts are falling. I have not traded and the Portfolio is still 125% net long. The market is maintaining its constructive tone today as many market leading stocks are higher. It is also positive to see Natural Gas making another intermediate-term low today and commodity-related stocks continue to weaken, which bodes well for future inflation readings. However, rising interest rates and a rebound in oil off its morning lows will likely result in more mixed trading into the close.