Mid-day Report

Indices
S&P 500 1,183.54 -.56%
Dow 10,566.20 -.58%
NASDAQ 2,002.31 -.70%
Russell 2000 619.95 -.88%
DJ Wilshire 5000 11,665.34 -.62%
S&P Barra Growth 569.06 -.47%
S&P Barra Value 609.46 -.77%
Morgan Stanley Consumer 572.34 -.71%
Morgan Stanley Cyclical 760.93 -.96%
Morgan Stanley Technology 457.05 -1.09%
Transports 3,737.50 -1.07%
Utilities 356.89 -.83%
Put/Call 1.34 +20.72%
NYSE Arms 1.16%
Volatility(VIX) 13.37 +.60%
ISE Sentiment 149.00 +7.19%
US Dollar 82.10 +.32%
CRB 319.49 -.51%

Futures Spot Prices
Crude Oil 56.75 +.62%
Unleaded Gasoline 156.90 +.47%
Natural Gas 7.27 +.51%
Heating Oil 158.35 -.50%
Gold 439.00 -.02%
Base Metals 130.66 +.51%
Copper 150.80 +.23%
10-year US Treasury Yield 4.50% +.82%

Leading Sectors
Energy +.87%
Oil Service +.70%
Homebuilders -.17%

Lagging Sectors
Computer Hardware -1.84%
Insurance -1.86%
HMOs -2.15%

Market Movers
PLMO -9.3% after meeting 3Q estimates and lowering 4Q guidance.
CTMI +15.86% after Siemens AG, the world’s second-largest maker of medical equipment, agreed to buy CTI Molecular.
BE +11.52% after hiring Oracle’s CFO as CEO and Fulcrum Global upgrade to Buy.
MSTR +5.99% on Smith Barney upgrade to Buy.
SCHL +7.15% after beating 3Q estimates and reiterating 05 outlook.
ADBE +4.47% on Fulcrum Global upgrade to Buy.
VPI +7.83% on rise in energy prices.
CCJ +4.49% on UBS upgrade to Buy.
GSOL -19.48% after saying it agreed to sell 3M shares at $13.50 each to institutional investors.
DRL -22.7% on continuing fall after revealing new details of its mortgage hedging in its 10-K.
RSH -9.45% after cutting 1Q and 05 outlooks and multiple downgrades.
FAF -7.34% after announcing new rated plan that cuts 05 estimates.

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
- The Import Price Index for February rose .8% versus estimates of a .6% increase and a downwardly revised .7% gain in January.
- The Preliminary Univ. of Mich. Consumer Confidence Index for March fell to 92.9 versus estimates of 94.9 and a reading of 94.1 in February.

Recommendations
- Goldman Sachs: Reiterated Outperform on NKE, SAP, K and LVS.
- Smith Barney: Said to Buy GE, target $45. Rated UCBH Buy, target $50. Rated EWBC Buy, target EWBC. Reiterated Buy on GIS, target $61. Reiterated Buy on K, target $48. Reiterated Buy on JBL, target $35. Reiterated Buy on TXT, target $85. Upgraded MSTR to Outperform, target $88. Reiterated Buy on GS, target $138. Reiterated Buy on NSM, target $28. Reiterated Buy on MWD, target $74. Said to Buy NEM and ABX, expecting test of December highs in Gold.
- Merrill Lynch: Added LUV to Focus 1 stock list.
- Deutsche Bank: Raised INTC to Buy, target $27.
- Morgan Stanley: Raised AAPL to Overweight, target $60. Raised EOG to Overweight. Cut TMX to Underweight.
- Prudential: Rated TIBX Overweight, target $10. Rated WEBM Sector Outperform, target $6.
- Wachovia: Raised CBR to Outperform.
- UBS: Raised ODP to Buy, target $30.

Mid-day News
US stocks are lower mid-day on continuing worries over rising interest rates and energy prices. US radio stations are broadcasting more music to retain listeners who have turned to Apple Computer’s iPod, Sirius Satellite Radio and XM Satellite Radio, the Wall Street Journal reported. All five funds in the federal thrift savings plan, a federal employee retirement plan used by 2 million government workers that’s a model for part of President Bush’s plan to save Social Security, exceeded Bush’s minimum goal of a 3% annual return on investment, returning 6.6% to 12% annually, the NY Times reported. Four Seasons Hotels is in talks to build a hotel in Moscow across the river from the Kremlin, Vedomosti reported. Martha Stewart has set off a poncho fashion frenzy, the Wall Street Journal reported. US utilities and other companies are complaining about a new FASB rule that may force them to add millions of dollars to their expense-accounting ledgers, the Wall Street Journal said. Escada AG, Germany’s second-largest clothing maker, and other fashion houses are turning to cell phone design as consumers adopt the devices as apparel accessories, the Wall Street Journal reported. High oil prices and concerns over carbon-dioxide emissions are making uranium a popular commodity, the Wall Street Journal reported. Delta Air Lines and other airlines are lobbying Congress for authority to extend pension payments over as many as 25 years, the Wall Street Journal reported. Two law-enforcement divisions at the US Department of Homeland Security have scrapped using stun guns in a decision affecting about 20,000 agents, USA Today reported. President Bush has invited Israeli Prime Minister Sharon to visit to his ranch next month in a bid to help the Middle East peace process, AP reported. The Federal Reserve may be nearing the end of its interest-rate increases as a result of higher oil prices, Paul McCulley, a managing director at PIMCO, told CNBC. The US dollar is headed for its first weekly advance against the yen in five weeks and is rising against the euro as declines in emerging-market stocks and bonds prompted some investors to seek the safety of US Treasuries, Bloomberg said. US Treasury notes are declining after a government report showed import prices rose more than forecast in February, Bloomberg reported. Wal-Mart will pay $11 million to settle federal allegations that it used illegal immigrants to clean stores, Bloomberg said. Three executives accused of defrauding their West Palm Beach hedge fund diverted more than $20 million in assets for their personal use, Bloomberg reported.

BOTTOM LINE: The Portfolio is substantially higher mid-day on gains in my Energy-related longs, Networking shorts, Software shorts and Chinese ADR shorts. I exited a few longs from various sectors this morning as they hit stop-losses, thus leaving the Portfolio’s market exposure Market Neutral. The tone of the market is negative today as the advance/decline line is very weak, almost every sector is lower and volume is decent. Measures of investor anxiety are mostly higher, which is a positive. Today’s overall market action is negative, considering the major indices’ oversold state. Cylicals and Tech stocks are underperforming, while Energy-related shares are outperforming. An oversold bounce should occur early next week as the NASDAQ defends the 2000 level. I expect US stocks to trade mixed into the close as worries over slowing economic growth, rising interest rates and higher energy prices offsets bargain-hunting.