Mid-day Update

S&P 500 1,122.34 +.78%
NASDAQ 1,863.61 +1.04%

Leading Sectors
Disk Drives +2.89%
Homebuilders +2.71%
I-Banks +2.28%

Lagging Sectors
Energy -.37%
Restaurants -.45%
Oil Service -1.05%

Other
Crude Oil 42.93 -2.41%
Natural Gas 4.75 +1.60%
Gold 401.00 -.37%
Base Metals 106.80 +1.07%
U.S. Dollar 89.35 -.23%
10-Yr. T-note Yield 4.26% -.77%
VIX 14.24 +2.37%
Put/Call .90 -11.76%
NYSE Arms 1.04 +4.0%

Market Movers
NFLX +16.6% after Newsweek reported that it entered an agreement with TiVo to let customers download movies into TiVo's digital video recorders.
RIMM +4.47% after announcing plans to enable BlackBerry Connect on Symbian OS-based devices, such as the Nokia 9500 Communicator.
TZOO +14.2% on short-squeeze.
FLE +11.9% after beating 1Q earnings estimates but missing its sales forecast.
CEPH +4.6% after saying it received a subpoena from U.S. prosecutors in Philadelphia for documents relating to sales and marketing practices from 1998 to the present.
PXD -4.6% after lowering its 3Q production forecast after hurricanes Charley and Earl forced worker evacuations and the company shut output at a Gulf of Mexico field.
HOV +7.7% after beating 3Q forecast and raising 05 outlook.
*Homebuilders up across the board on HOV report and falling interest rates.

Economic Data
None of note.

Recommendations
Goldman Sachs reiterated Underperform on PYX, LVLT, VRSN and T. Goldman reiterated Outperform on AIG, ASN, FD, IGT, FS, HOT, FDC, CZN, UST and ALL. Citi SmithBarney reiterated Buy on GE, target $38. OSG raised to Overweight at JP Morgan. GMR raised to Overweight at JP Morgan. SNIC rated Overweight at JP Morgan. ATRS raised to raised to Outperform at CSFB, target $30. CSCO raised to Sector Outperform at CIBC, target $25.

Mid-day News
U.S. stocks are higher mid-day on optimism over falling energy prices, declining interest rates and pro-business political rhetoric. The U.S. Navy is proposing cuts in its shipbuilding program that may hurt the industry, as the Pentagon considers shifting the military's focus from preparing for large-scale warfare to building resources for guerrilla warfare, long-term peacekeeping and counter-terrorism efforts, the Washington Post reported. Denver billionaire Philip Anschutz hired Frederick Anderson and Ryan McKibben to help study potential acquisitions among U.S. weekly or daily newspapers, the Denver Post reported. Disney's ABC broadcast network is experimenting with "ABC News Now," a 24-hour news broadcast available on the Internet, mobile phones and digital tv, the AP reported. Several pharmaceutical companies are participating in a $3 million pilot project to test a system for tracking and identifying prescription drug battles using radio frequency identification devices, the Boston Herald reported. Frank Quattrone, who earned $120 million at the height of the stock market bubble as Credit Suisse First Boston's top investment banker for technology companies, may receive 21 months in prison, Bloomberg reported. Hurricane Ivan, the fifth Atlantic hurricane this year, was racing west toward Trinidad, Tobago and other Caribbean islands on a track that's expected to take it past Cuba to the edge of the Gulf of Mexico by the weekend, Bloomberg reported. More than 2.5 million Floridians are still without power as of 9am local time as a result of Hurricane Frances, according to Florida's Emergency Management Department. Crude oil futures in New York are falling after Hurricane Frances missed U.S. offshore production facilities in the Gulf of Mexico, Bloomberg reported.

BOTTOM LINE: The Portfolio is substantially higher mid-day as my security, gaming, telecom equipment and internet longs are rising. I have not traded and the Portfolio is 125% net long. The overall tone of the market is good today. Interest rates are falling, oil and gasoline prices are declining, the CRB is dropping and the VIX/Arms are rising, which are all positives for stocks. While the CRB briefly broke below its 200-day moving average a couple of times over the last few months, it appears headed for a more substantial technical breakdown. This would be a very positive development with respect to future inflation readings. Commodity prices have been the main source of exaggerated inflation fears. I expect U.S. stocks to rise modestly into the close.