Mid-day Update

S&P 500 1,128.80 +.43%
NASDAQ 1,917.24 +1.21%

Leading Sectors
Semis +3.51%
Disk Drives +2.20%
Biotech +1.61%

Lagging Sectors
Banks -.16%
Utilities -.50%
Tobacco -.75%

Other
Crude Oil 44.04 +2.87%
Natural Gas 4.85 +6.13%
Gold 405.30 +.40%
Base Metals 107.83 -.40%
U.S. Dollar 88.52 +.15%
10-Yr. T-note Yield 4.15% -.88%
VIX 13.25 -3.71%
Put/Call .68 -18.07%
NYSE Arms .55 -25.68%

Market Movers
BRCM +10.6% on bargain-hunting after lowering 3Q estimates.
NSM +8.0% after Sanford C. Bernstein raised it to Outperform, target $20.
DNET +26.5% after BAE Systems Plc agreed to acquire it for $494.4 million.
MSTR +16.3% after First Albany raised it to Strong Buy, target $56.
MKSI +16.2% after positive mention in Barron's.
TZOO +12.2% on continuing short-squeeze.
IMCL +7.33% after SunTrust Robinson upgrade to Buy, target $66.
APSG -7.8% after Advest downgrade to Neutral from Buy.

Economic Data
None of note.

Recommendations
UBS cut EQR, HME and AIV to Reduce. SHW raised to Outperform at CSFB, target $46. PHCC cut to Underweight at JP Morgan. MERQ raised to Buy at Bank of America, target $42.00. ENS raised to Buy at Bank of America, target $16. CHS raised to Buy at Bank of America, target $44. JRC was raised to Buy at Bank of America, target $21. LEA raised to Buy at Bank of America, target $66. MCO added to Focus List at Morgan Stanley. Goldman Sachs reiterated Outperform on KMI, ADP, KMR, IP, FS, IGT, HD, AMGN, AET and KMP. Goldman rated Outperform on DEX, target mid-upper 20's. Goldman reiterated Underperform on SGP.

Mid-day News
U.S. stocks are higher mid-day, led by technology shares, on optimism over falling interest rates, declining inflation fears, falling terrorism concerns and future economic growth. The FDA approved an implantable corrective lens made by Dutch company Ophtec BV, which can correct nearsightedness without laser surgery, the Wall Street Journal reported. Small U.S. mutual funds are considering leaving the business as they struggle with the costs of complying with new rules designed to curb abuse, the Wall Street Journal reported. IBM will give some of its speech-recognition software to two open-source software groups as it promotes wider use and development of such applications, the NY Times reported. The National Highway Traffic Safety Administration is expected to mandate safety power window switches in all vehicles within four years, USA Today reported. Gun dealers say a 1994 federal assault weapons ban that is set to expire at midnight didn't prevent many of the firearms from reaching the streets, the Washington Post reported. The U.S. crime rate last year held at the lowest level since the government began surveying crime victims in 1973, the Washington Post reported. Krispy Kreme Doughnuts said its auditor won't complete its review of the company's financial statements for the latest quarter until it gets more information from an outside investigator, Bloomberg reported. Wal-Mart said September same-store sales are rising within forecast for a gain of 2-4% as shoppers bought back to school supplies, Bloomberg said. US Airways must rely on daily revenue and cash to operate during its bankruptcy reorganization, leaving it vulnerable to liquidation should the funds run out or a creditor seeks court permission for payment, Bloomberg reported. Rogers Communications plans to buy AT&T Wireless Services' 34% stake in Rogers Wireless for $1.37 billion, Bloomberg said. Hurricane Ivan was heading toward Cuba today on a track that will bring it ashore in Florida or Alabama sometime Thursday, Bloomberg reported. Crude oil rose and natural gas soared in New York as the approach of Hurricane Ivan disrupted production and tanker shipments in the Gulf of Mexico, where a quarter of U.S. oil and natural gas is pumped, Bloomberg reported. Time Warner withdrew its bid for MGM, saying it couldn't reach agreement on the price of the film studio, Bloomberg said.

BOTTOM LINE: The Portfolio is substantially higher mid-day on strength in my software, semi/semi-equipment, steel and internet longs. I have not traded today and the Portfolio is still 125% net long. The tone of the market is positive again today as most sectors and stocks are rising, notwithstanding the rise in energy prices related to Hurricane Ivan. Interest rates are falling again on Fed comments and declining inflation fears. On the negative side, measures of investor anxiety are falling again and are near levels normally associated with short-term tops. I expect U.S. stocks to trade mixed into the close on a consolidation of recent gains.