Mid-day Scoreboard

Indices
S&P 500 1,168.35 -.51%
DJIA 10,424.17 -.59%
NASDAQ 1,978.87 -.68%
Russell 2000 608.01 -1.16%
DJ Wilshire 5000 11,513.50 -.55%
S&P Barra Growth 564.64 -.51%
S&P Barra Value 599.99 -.39%
Morgan Stanley Consumer 574.12 -.14%
Morgan Stanley Cyclical 736.17 -1.30%
Morgan Stanley Technology 450.55 -.56%
Transports 3,684.45 -1.51%
Utilities 351.93 -.72%
Put/Call .66 unch.
NYSE Arms 1.23 +43.62%
Volatility(VIX) 13.92 +1.31%
ISE Sentiment 161.00 -17.44%
US Dollar 84.37 -.17%
CRB 308.70 +.44%

Futures Spot Prices
Crude Oil 54.10 +.09%
Unleaded Gasoline 156.90 -.24%
Natural Gas 7.27 +3.87%
Heating Oil 155.00 +.16%
Gold 426.00 unch.
Base Metals 127.85 +.26%
Copper 147.05 +1.10%
10-year US Treasury Yield 4.58% -1.19%

Leading Sectors
Hospitals +2.41%
Insurance +1.12%
Foods +.12%

Lagging Sectors
Biotech -1.06%
Gaming -1.48%
Iron/Steel -2.40%

Links of Interest
Market Internals
Movers & Shakers
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

BOTTOM LINE: US stocks are lower mid-day on worries over slowing global growth. The Portfolio is higher on gains in my Chinese ADR shorts and Internet shorts. I added a few new shorts this morning, thus bringing the Portfolio’s market exposure to 25% net short. One of my new shorts is PD and I am using a $102 stop-loss on this position. The tone of the market is negative as the advance/decline line is lower, most sectors are lower and volume is light. Small-caps and Cyclicals are once again underperforming and measures of investor anxiety are mostly higher. Today’s overall market action is negative considering recent losses, the decline in interest rates and merger activity. This appears to be the beginning of the final push lower that I have been anticipating. Levels of investor anxiety should reach levels necessary to help form a meaningful bottom over the next few weeks. I continue to expect the second half of the year to be much better for the equities. I expect US stocks to trade mixed-to-lower into the close on worries over slowing global growth.

Today's Headlines

Bloomberg:
- Russian President Putin’s government expects to speed up state asset sales as the country seeks to restore investor confidence after the state seized OAO Yukos Oil’s biggest unit.
- US consumer confidence fell in March for a second straight month as higher gasoline prices damped the enthusiasm sparked by job growth.
- The SEC, trying to ease concerns over shareholder lawsuits, gave companies flexibility in reporting stock options as expenses on their financial statements beginning as soon as June.
- Hewlett-Packard chose NCR Corp. CEO Mark Hurd as its new CEO.
- MCI Inc. accepted a new $7.64 billion takeover from Verizon Communications, rejecting a higher bid from Qwest Communications.
- US Treasury notes rose as a drop in consumer confidence bolstered speculation high energy prices will damp consumer spending, helping to keep inflation in check.

The Wall Street Journal:
- Billionaire investor Warren Buffett was called by regulators to answer questions about an insurance transaction between a unit of his Berkshire Hathaway and American International Group.
- Cingular Wireless LLC had more complaints than any other cell-phone service in the fourth quarter.
- VeriSign Inc. is the leading candidate for operating the “.net” registry when its existing contract with the Internet Corporation for Assigned Names and Numbers expires.
- Closely held Cook Inc. is developing drug-coated stents, or small tubes used to open clogged arteries, for use in arteries away from the heart to see if they help blockages.
- Merck & Co. hasn’t been able to find a “heavy hitter” prepared to take over from CEO Raymond Gilmartin, who retires in March 2006.
- Identity thieves can find sensitive information using Google’s search engine or other services by knowing what to look for, putting the onus on Web sites to remove such data.

The New York Times:
- Less than 5% of the 20 million low-income US residents receiving Medicare applications for financial assistance will respond because the form is too complex.
- US airlines are cutting seat capacity by retiring less efficient planes because of fuel price increases.
- A former aide to UN Secretary General Kofi Annan, Iqbal Riza, will be criticized in a report for throwing away documents on the Iraqi oil-for-food program.
New York Post:
- Kohlberg Kravis Roberts is negotiating to buy a majority stake in GM’s GMAC Commercial Mortgage unit for at least $1 billion.

Dow Jones Newswires:
- OPEC suspended talks to raise output quotas for a second time this year.

Barron’s:
- Tiffany & Co. may be a target for a takeover, citing money manager and shareholder Shawn Krevetz of Esplanade Capital in Boston.

Yonhap News:
- Samsung SDI, the world’s largest maker of plasma display panels, forecast the present glut in the products will turn to a shortage during the fourth quarter.

Press Trust of India:
- PepsiCo Inc. plans to spend as much as $500 million to expand its business in India in the next three to five years.

Tex Report:
- Tokyo Steel Manufacturing has offered to pay as much as $19 more on each ton of ferrous scrap it will buy in the domestic market starting tomorrow.

Economic Releases

- Consumer Confidence for March fell to 102.4 versus estimates of 103.0 and a reading of 104.4 in February.

Morning Buy/Sell Recommendations

Goldman Sachs:
- Reiterated Outperform on FSH, YUM, PFE and BBBY.
- Rated AIG Outperform.

Smith Barney:
- Said to Sell ATK, target $60, and Buy DRS, target .
- Reiterated Buy on CD, target $28.
- Reiterated Buy on AA, target $42.
- Reiterated Buy on FCX, target $50.
- Raised TPP to Buy, target $43.

CSFB:
- Raised OTEX to Outperform, target $25.

Prudential:
- Downgraded LTD to Underweight, target $21.
- Reiterated Buy on ROK, target $70.

Merrill Lynch:
- Rated NOV Buy, target $55.
- Reiterated Buy on CELG, target $42.

Banc of America:
- Reiterated Buy on LYO, target $35.

Jeffries:
- Rated OSUR Buy, target $11.

Wachovia:
- Rated ISIL, LLTC and MCRL Outperform.

CIBC:
- Rated CVH Sector Outperform, target $84.
- Rated CI Sector Outperform, target $110.
- Rated WLP Sector Outperform, target $150.
- Rated UNH Sector Outperform, target $112.
- Rated AET Sector Outperform, target $88.
- Rated MGLN Sector Underperform, target $30.
- Rated HNT Sector Underperform, target $34.

UBS:
- Raised HBAN to Buy, target $27.

Oppenheimer:
- Raised HCA to Buy, target $62.
- Raised CMVT to Buy, target $30.

Piper Jaffray:
- Raised SUPX to Outperform, target $23.
- Rated WOOF Outperform, target $24.
- Rated CENT Outperform, target $50.

Legg Mason:
- Rated AMAT Buy, target $24.
- Rated CYMI Buy, target $34.
- Rated KLAC Buy, target $59.
- Rated LRCX Buy, target $45.
- Rated MTSN Buy, target $15.
- Rated VSEA Buy, target $50.

Tuesday Watch

Late-Night Headlines
Bloomberg:
- American International Group's Maurice "Hank" Greenberg plans to step down as chairman two weeks after probes of potential earnings manipulation forced his resignation as CEO of the world's largest insurer.
- Japan's household spending fell more than expected in February and unemployment rose, suggesting the world's second-largest economy may not be able to rely on consumers to drive a recovery from recession.
- China Petroleum & Chemical Corp. which makes two-thirds of the nation's fuels, said 2004 profit rose 61% to a record on higher demand for gasoline, diesel and chemicals.
- Aluminum Corp. of China, the country's biggest producer of the metal, had a 42% increase in second-half profit after it raised prices of alumina, a semi-processed material it sells to other smelters.
- EQT Partners AB, a buyout firm backed by Sweden's Wallenberg family, and Goldman Sachs Group's private-equity arm agreed to buy Denmark's ISS A/S, the world's biggest cleaning company, for about $3.8 billion.
- Societe Generale SA said oil prices over $50 a barrel are restraining fuel demand from China.

Washington Post:
- Sony Corp. may have to stop US sales of PlayStation 2 video-game consoles if it loses an appeal to a court ruling stating that the company violated patents by Immersion Corp.
- Text messaging on cellular telephones has become a vehicle for free speech in Arab countries, particularly in the Persian Gulf.
- The federal government is one of the most welcoming employers in the US for senior citizens, and top officials remain in their jobs and powerful long after the typical age for private sector retirement.

Financial Times:
- Merrill Lynch plans to expand its private client business internationally.
- The value of global mergers and acquisitions activity fell 23% in the first quarter of 2005 to $513 billion, compared with $670 billion in the last quarter of 2004.

Commercial Times:
- Taiwan won't toughen its stand against China after the mainland legislature passed laws authorizing an invasion of the island if it declares independence.

Economic Times:
- Merck & Co. may set up a unit in India to sell patented products.

China Securities Journal:
- China's economic growth probably slowed to 8.8% in the first quarter on lower agricultural output and investment in factories, roads and other fixed assets.

Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on MSFT and BSX.
- Reiterated Attractive view of Hospital sector.

Night Trading
Asian Indices are -1.50% to -1.0% on average.
S&P 500 indicated -.37%.
NASDAQ 100 indicated -.51%.

Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Before the Bell CNBC Video(bottom right)
Asian Indices
European Indices
Top 20 Business Stories
In Play
Bond Ticker
Analyst Actions
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule

Earnings of Note
Company/EPS Estimate
APOL/.46
CCI/-.15
HLYW/.35
URI/.26
VTS/.41

Splits
None of note

Economic Releases
10:00 EST:
- Consumer Confidence for March is estimated to fall to 103.0 versus a reading of 104.0 in February.

BOTTOM LINE: Asian indices are lower as commodity and exporter shares in the region continue to decline on worries over slowing global demand. I expect US equities to open modestly lower in the morning and to weaken throughout the day on worries over slowing global growth and the possibility the Fed will accelerate the pace of rate hikes. The Portfolio is market neutral heading into tomorrow.