Mid-day Update

S&P 500 1,128.75 +.47%
NASDAQ 1,906.77 +.13%

Leading Sectors
Oil Service +1.97%
Energy +1.55%
Semis +1.09%

Lagging Sectors
HMOs -.91%
I-Banks -1.05%
Broadcasting -1.28%

Other
Crude Oil 45.00 +2.55%
Natural Gas 5.15 +9.13%
Gold 407.20 +.17%
Base Metals 109.57 -.40%
U.S. Dollar 88.95 +.17%
10-Yr. T-note Yield 4.10% +.80%
VIX 14.10 -2.02%
Put/Call .85 +11.84%
NYSE Arms .67 -53.79%

Market Movers
QCOM -4.6% after boosting 4Q guidance, but not meeting optimistic projections.
CTAS +5.9% after meeting 4Q estimates and maintaining 05 guidance.
TEK +7.2% after beating 1Q estimates substantially and raising 2Q guidance.
ALO +10.7% after saying a U.S. appeals court lifted an order blocking the company from selling a generic version of the epilepsy treatment Neurontin, Pfizer's 4th largest drug.
TTEK -19.7% after cutting 4Q forecast.
SEE -7.95% after cutting 2004 outlook.
AXCA -8.3% on JP Morgan downgrade to Neutral.
NTBK -8.8% on Raymond James downgrade to Underperform.
FLML -25.2% after saying it ended an agreement with Bristol-Myers and Brean Murray downgrade to Sell.

Economic Data
Preliminary Univ. of Mich. Consumer Confidence for September was 95.8 versus estimates of 96.7 and a reading of 95.9 in August.

Recommendations
DO raised to Overweight at Lehman, target $37. TRDO raised to Outperform at Raymond James, target $12.50. ELOS rate Sector Outperform at CIBC, target $21. Goldman Sachs reiterated Outperform on GDT, PFE, BHI and NEM. Goldman reiterated Attractive view of Oil Service sector, favorites are RIG, DO, SLB, BHI and SII. Goldman raised NBP to Outperform, target $48. Citi SmithBarney said to increase exposure to Oil Service sector, favorites are NE, ESV and GSF. Citi reiterated Buy on JBL, target $32. Citi reiterated Buy on NT, target $5. Goldman reiterated Underperform on HRB. Laszlo Birinyi, president of Birinyi Associates, recommended purchase of shares of GOOG, EBAY and AMZN.

Mid-day News
U.S. stocks are modestly higher mid-day as strength in the energy sector more than offsets higher energy prices. Reuters has officially placed Canada's government-run healthcare system on its list of humanitarian emergencies. Homemade bombs were discovered near southeastern Moscow's Vykhino subway station and in the suburban town of Liubertsy, Interfax reported. The Chanel SA and Donna Karen fashion labels are showcasing clothes and accessories on new television shows, including "The Mountain," on Time Warner's WB Network to try to boost retail sales, the Wall Street Journal reported. Recent guilty pleas by senior Enron Corp. executives have helped prosecutors build their conspiracy and fraud case against former Enron leaders Jeff Skilling and Ken Lay, the Washington Post said. The FTC said rewards of $100,000 to $250,000 may be needed to persuade people to turn in senders of unsolicited e-mail, called spam, over the Internet, the AP reported. California racetrack owners who want to add slot machines to their businesses filed a lawsuit yesterday to derail agreements giving five American Indian tribes the right to have unlimited numbers of slot machines, the LA Times reported. Russian President Putin said Russian armed forces are preparing "preventive action against terrorists" after attacks that cost at least 430 lives over the past month, Interfax reported. Ford Motor raised its forecast for third-quarter earnings by 10 cents a share, Bloomberg reported. Circuit City said its second-quarter loss narrowed as the company sold more plasma-screen tvs and benefited form the acquisition of a Canadian retailer, Bloomberg said. Cooper Tire agreed to sell its Cooper-Standard Automotive business for $1.17 billion to the Cypress Group and Goldman Sachs Capital Partners, Bloomberg reported. Qualcomm increased its fourth-quarter and 2004 forecasts and said it is reviewing how it accounts for royalty payments, Bloomberg said. Crude oil rose for a second day on concern that shutdowns caused by Hurricane Ivan will further reduce U.S. inventories that have dropped 8.7% since the beginning of July, Bloomberg reported.

BOTTOM LINE: The Portfolio is slightly higher mid-day on strength in my Chinese ADRs and security-related stocks. I have not traded today and the Portfolio is still 100% net long. The tone of the market is weaker today with volume relatively light and the advance/decline line falling. While I expect energy prices to decline next week, a rise from current levels would likely begin to pressure stocks. I expect U.S. stocks to trade mixed-to-weaker into the afternoon.