Mid-day Update

S&P 500 1,099.48 +.30%
NASDAQ 1,845.68 +.48%

Leading Sectors
Networking +1.24%
Oil Service +.99%
Semis +.88%

Lagging Sectors
Papers -.94%
Iron/Steel -1.21%
Homebuilders -1.73%

Other
Crude Oil 45.12 -.20%
Natural Gas 5.34 +.04%
Gold 409.20 +1.06%
Base Metals 107.78 -1.29%
U.S. Dollar 89.36 -.10%
10-Yr. T-note Yield 4.24% -.73%
VIX 15.0 -2.15%
Put/Call .66 -16.46%
NYSE Arms 1.05 -14.63%

Market Movers
DITC +20.8% after beating 1Q estimates and raising 2Q forecast.
SMTC +7.3% after beating 2Q estimates, reiterating 3Q forecast and Legg Mason upgrade to Buy.
BNK +10.5% after disclosing it is in talks with Toronto-Dominion Bank for "a possible transaction."
WSM +10.2% after beating 2Q estimates and raising 3Q/4Q forecasts.
TZOO +5.3% on continuing short-squeeze.
EYET +4.7% after saying they will learn Friday whether their drug for treating blindness will move closer to FDA approval.
SEAC -10.4% after beating 2Q forecast and reiterating 3Q guidance.
HRB -7.6% after missing 1Q estimates and giving weak 05 guidance.
CNX -6.9% after lowering 3Q estimates substantially.

Economic Data
Durable Goods Orders for July rose 1.7% versus estimates of a 1.0% increase and an upwardly revised 1.1% rise in June.
Durable Goods Less Transportation rose .1% versus estimates of a 1.3% increase and a .3% fall in June.
New Home Sales for July came in at 1.13M versus estimates of 1.3M and a downwardly revised 1.21M in June.

Recommendations
Goldman Sachs reiterated Outperform on GDT, STLD, CVD, IACI, WAG and FSL. Goldman reiterated Underperform on HRB. Citi SmithBarney reiterated Buy on GIS, target $51.50. Citi reiterated Buy on AVO, target $46. Citi reiterated Buy on COO, target $70. CFSI rated Overweight at JP Morgan. PIR rated Sell at Deutsche, target $14. JWN rated Buy at Deutsche Bank, target $47. NMG/A rated Buy at Deutsche Bank, target $67. FD rated Buy at Deutsche Bank, target $55. SKS rated Sell at Deutsche Bank, target $10. DDS rated Sell at Deutsche Bank, target $15. SMTC raised to Buy at Legg Mason, target $23. PPC raised to Outperform at CSFB, target $30. CFSI rated Outperform at CSFB, target $16. Merrill Lynch rated COO Focus 1 stock of the week.

Mid-day News
U.S. stocks are higher mid-day on another fall in oil prices and mixed economic reports. Senator Kerry's campaign promises conflict with his pledge to reduce the federal budget deficit, the Washington Post said, citing its review of the four-term senator's tax cut and spending proposals. Scientists at a Becton, Dickinson unit and the U.S. Army have developed an inhaled vaccine that could potentially protect against anthrax infection and be more easily stockpiled for emergencies, Reuters reported. Viacom may enter the video game business and is eyeing Electronic Arts as a purchase target, the New York Post said. GM, Ford and Chrysler are offering rebates and financing deals that lower the value of their vehicles in the minds of consumers, the AP reported. California may surpass Nevada in annual revenue from gambling by the end of the decade, the LA Times said. Sprint and Mediacom agreed to provide phone service to more than 2 million Mediacom cable customers starting next year, the companies said. The UN appealed for $434 million to provide for humanitarian needs in Sudan's western Darfur region, and other areas of the African country, Bloomberg reported. U.S. orders for durable goods rose 1.7% in July, more than forecast, as bookings surged for commercial aircraft and demand increased for business equipment, Bloomberg reported. U.S. new home sales in July fell more than forecast to a 1.13 million annual rate, the slowest pace of the year, Bloomberg said.

BOTTOM LINE: The Portfolio is slightly higher mid-day as my declining homebuilding longs are more than offset by my falling steel shorts and rising alternative energy longs. I have not traded today and the Portfolio is still 50% net long. The tone of the market is improving again today as oil continues to fall. While the new home sales numbers were disappointing, they were still relatively strong and will likely accelerate as mortgage rates fall further and energy prices decline. I expect U.S. stocks to rise modestly into the close.