Mid-day Update

S&P 500 1,107.10 -.27%
NASDAQ 1,868.72 -.57%

Leading Sectors
Homebuilders +1.89%
Broadcasting +.38%
Drugs +.30%

Lagging Sectors
I-Banks -1.29%
Networking -1.31%
Airlines -3.45%

Other
Crude Oil 49.30 +.86%
Natural Gas 5.23 -2.91%
Gold 411.10 +.34%
Base Metals 117.02 +.88%
U.S. Dollar 88.21 -.21%
10-Yr. T-note Yield 3.99% -.76%
VIX 14.62 +2.38%
Put/Call .72 -22.58%
NYSE Arms 1.17 +11.43%

Market Movers
CX -7.5% after saying it agreed to buy RMC Group Plc for $4.15 billion to double revenue and expand in concrete markets in Europe and the U.S.
TOM -20.1% after saying U.S. authorities are investigating commissions the company paid to an overseas-purchasing unit.
VSEC +38.6% after saying it received a cost-plus-fixed-fee contract from the U.S. Navy valued as much as $1 billion.
NSTK +33.7% after announcing a global alliance with Merck(MRK) to develop an experimental nasal spray treatment for obesity.
PER +11.4% after boosting 3Q estimates.
CNCT after saying it had commenced the Phase III clinical trial program for Desilux, a low-potency topical steroid.
GMAI -14.7% on negative Barron's article.

Economic Data
New Home Sales for August were 1184K versus estimates of 1155K and 1082K in July.

Recommendations
Goldman Sachs reiterated Outperform on RE, ALL, ENH, AGN, FSL, HOT, KO, BSX, DNA, AMGN, STLD, FS, IGT, HD, GDT, MDT, MRVL and PFE. Goldman reiterated Underperform on AMCC. Citi SmithBarney reiterated Buy on MMM, target $95. Citi reiterated Buy on VIAB, target $50. Citi reiterated Buy on WMT, target $65. Citi reiterated Buy on HAL, target $44. Citi reiterated Sell on PGN, target $38.50. Citi reiterated Buy on UNM, target $20. Citi reiterated Buy on FNM, target $81. ISG raised to Outperform on CSFB. VISG rated Buy at UBS. WMT upgraded to Buy at Bank of America, target $60. JBLU, FRNT and AAI cut to Underweight at JP Morgan. FDO raised to Buy at Bank of America, target $33.50. IMOS raised to Outperform at Thomas Weisel, target $10. PTEN cut to Underweight at Morgan Stanley. TOM downgraded to Underweight, target $8.

Mid-day News
U.S. stocks are falling modestly mid-day on profit-taking and continuing fears over higher energy prices. IBM will invest $250 million over the next five years and employ1,000 people in a new business unit supporting products and services related to sensor networks, the NY Times reported. PalmSource will announce tomorrow its first operating system for so-called smart phones, the International Herald Tribune reported. Bank of America may close or merge as many as 38 mutual funds as part of its acquisition of FleetBoston Financial, the Boston Herald reported. Starbucks will raise beverage prices 11 cents on average, the Wall Street Journal reported. JP Morgan agreed to buy hedge fund company Highbridge Capital, Bloomberg reported. Anglo American Platinum, Impala Platinum and Northam Platinum may face strikes over pay at South African mines, crippling 60% of the world's platinum production and boosting prices of the metal, Bloomberg said. Walgreen said fourth-quarter profit rose 18%, helped by sales of prescription drugs, Bloomberg reported. Fannie Mae agreed to correct its bookkeeping policies to meet generally accepted accounting principles, Bloomberg said. A series of small tremors culminating in more than 10 larger earthquakes near Mount St. Helens may be a precursor to explosions, landslides and the release of ash clouds, the U.S. Geological Survey said. U.S. new home sales surged 9.4% in August, propelled by the lowest mortgage rates in four months, Bloomberg reported. Comcast is working with Time Warner to explore a potential transaction regarding bankrupt cable-tv operator Adelphia Communications, Bloomberg reported. Jeanne, the fourth hurricane to hit Florida in two months, weakened as it moved into Georgia, leaving behind a trail of destruction and at least 7 deaths, Bloomberg said. Crude oil is rising amid concern rebel attacks in Nigeria will reduce production and U.S. refiners will struggle to replenish supplies disrupted by Hurricane Ivan, Bloomberg reported.

BOTTOM LINE: The Portfolio is slightly lower mid-day as my declining security longs are more than offsetting my rising homebuilding longs. I have not traded today and the Portfolio is still market neutral. The tone of the market is negative today and the CRB is spiking up, mostly as a result of the hurricanes. I expect U.S. stocks to traded mixed into the afternoon.