Mid-day Report

Indices
S&P 500 1,200.46 +.03%
Dow 10,766.60 -.14%
NASDAQ 2,038.75 -.14%
Russell 2000 626.59 -.04%
DJ Wilshire 5000 11,826.21 +.05%
S&P Barra Growth 577.14 -.09%
S&P Barra Value 618.84 +.13%
Morgan Stanley Consumer 583.70 +.09%
Morgan Stanley Cyclical 776.27 -.08%
Morgan Stanley Technology 467.93 -.25%
Transports 3,828.69 -.09%
Utilities 358.73 +1.30%
Put/Call 1.13 +15.31%
NYSE Arms .86 -16.50%
Volatility(VIX) 12.92 +.94%
ISE Sentiment 142.00 +9.23%
US Dollar 82.10 +.84%
CRB 316.70 -.59%

Futures Spot Prices
Crude Oil 54.95 +.86%
Unleaded Gasoline 152.00 +.03%
Natural Gas 7.19 +6.25%
Heating Oil 154.50 +.08%
Gold 441.60 -1.16%
Base Metals 129.73 -.96%
Copper 147.05 -.57%
10-year US Treasury Yield 4.52% -.49%

Leading Sectors
Airlines +1.45%
Utilities +1.34%
Hospitals +.79%

Lagging Sectors
Homebuilders -.93%
Internet -1.21%
Iron/Steel -2.72%

Market Movers
ASCL +16.62% after IBM agreed to buy it for about $1.1 billion.
AZO -10.4% after Office Depot hired away its CEO.
HANS +25.24% after beating 4Q estimates.
CTT +12.1% after beating 2Q estimates and giving positive 05 guidance.
MSTR +7.57% on Jeffries upgrade to Buy.
ONXX +7.68% on technical rebound.
AVCT -31.6% after cutting 1Q estimates substantially.
FFIV -6.89% on Pacific Crest downgrade to Sector Perform.
NX -5.1% on continuing worries over the possibility of future price weakness in base metals.
ELBO -7.01% after beating 4Q estimates, lowering 1Q outlook and raising 05 guidance.
CMC -7.54% on continuing worries over the possibility of future price weakness in base metals.

Mid-day Overview
Market Internals
I-Watch Sector Overview
NYSE Unusual Volume
NASDAQ Unusual Volume
NASDAQ 100 Heatmap
DJIA Quick Charts
Chart Toppers
Hot Spots
Option Dragon
Real-time Intraday Chart/Quote

Economic Data
None of note

Recommendations
- Goldman Sachs: Reiterated Outperform on AIG, LVS, IBM and MO. Reiterated Underperform on PSA.
- Smith Barney: Said to Buy BCII on pullback, target $37. Reiterated Sell on EAT, target $36. Reiterated Buy on ALL, target $59. Reiterated Buy on WMT, target $65.
- Banc of America: Raised BBBB to Buy, target $20. Downgraded AGCC to Sell, target $2.
- JP Morgan: Raised WMB to Overweight, target $23. Downgraded MANH to Underweight. Rated FL Overweight. Raised LIN to Overweight.
- Bear Stearns: Raised SYNA to Outperform, target $32.
- Deutsche Bank: Raised PBG to Buy, target $34.
- Thomas Weisel: Raised PBY to Outperform.
- Barron’s: Said shares of Decorator Industries(DII) may double in the next few years, especially if demand revives for factory-built homes.

Mid-day News
US stocks are slightly lower mid-day on worries over stubbornly high energy prices. US media coverage of last year’s election was three times more likely to be negative toward President Bush than Democratic challenger John Kerry, according to a study by the Project for Excellence in Journalism that is affiliated with the Columbia University Graduate School of Journalism, Reuters reported. The 11 member-countries of OPEC, replete with cash from high oil prices, have been importing heavily from Europe, the US and Asia, thus cushioning the impact of the high energy prices on the world economy, the Wall Street Journal reported. Affiliated Computer Services, the largest processor of student-loan payments, is in talks to acquire Mellon Financial’s outsourcing unit, the Wall Street Journal said. Investments in liquefied natural gas projects may climb to about $67 billion in the next five years, with shipping accounting for a third of that, Lloyd’s List reported. Yahoo! plans to challenge Google in the online-ad market for small to mid-sized Web publishers, the Wall Street Journal reported. Maurice “Hank” Greenberg plans to step down as CEO of AIG as early as this week, the Wall Street Journal reported. Time Warner shares have fallen 10% since December because of doubts about the company’s joint $17.6 billion bid with Comcast for Adelphia’s cable systems, and many investors think the shares now represent an opportunity, the Wall Street Journal said. NY Times Co. is considering charging readers to access news on its Internet site, as online readership over the last decade has surpassed paid print subscribers, the Times reported. OPEC may increase output to meet rising demand for oil and ease prices that remain above $50/bbl., AFP reported. A group of Bloggers with liberal views are hosting telephone conference calls to share reporting with mainstream news organizations and compete with conservative Web commentators, the NY Times reported. Air pollution from other countries contaminates the air, lakes and streams in the US, USA Today reported. Toyota Motor today is expected to announce that it will become the auto sponsor for the NBA and the Women’s NBA, the Wall Street Journal reported. OAO Yukos Oil may next month resume shipping crude abroad through pipelines, Interfax reported. Streets in the Lebanese capital, Beirut, today filled with more than 300,000 people gathering for a rally by opposition supporters demanding an end to Syrian control over the nation, AFP reported. Speculation of further increases in US Treasury note yields is at an all-time high, as judged by the number of short positions taken in the past two weeks, though the sentiment behind the move is likely wrong, Merrill Lynch’s chief North American economist said. Two Johnson & Johnson patents for coronary stents were infringed by competitor Medtronic, a US jury decided, paving the way for a second trial on damages, Bloomberg reported. The US dollar is rising the most against the euro since Feb.7 as some traders said a decline last week to the lowest since the beginning of the year was excessive, Bloomberg reported.

BOTTOM LINE: The Portfolio is higher mid-day on gains in my Energy-related longs and Networking shorts. I added a few new shorts this morning, thus leaving the Portfolio’s market exposure 25% net short. One of my new shorts is NTE and I am using a $28.75 stop-loss on this position. The tone of the market is mildly negative as the advance/decline line is lower, sector performance is mixed and volume is light. Measures of investor anxiety are mixed. Today’s overall market action is slightly negative, considering the lack of leadership and last week’s losses. It is a positive to see the US dollar rising and the CRB Index falling. Long-term interest rates may head a little higher in the short-run, however I continue to expect rates to head back down later in the year. I expect US stocks to trade mixed-to-lower from current levels into the close on worries over rising energy prices and technical deterioration.