Mid-day Scoreboard

Indices
S&P 500 1,180.90 -.03%
DJIA 10,453.73 -.07%
NASDAQ 1,993.68 -.29%
Russell 2000 608.25 -.41%
DJ Wilshire 5000 11,629.12 -.06%
S&P Barra Growth 570.38 unch.
S&P Barra Value 606.27 -.02%
Morgan Stanley Consumer 583.96 -.02%
Morgan Stanley Cyclical 739.36 -.46%
Morgan Stanley Technology 451.38 -.52%
Transports 3,599.19 +.07%
Utilities 366.05 +1.11%
Put/Call 1.07 +15.05%
NYSE Arms 1.16 -16.12%
Volatility(VIX) 11.99 -4.99%
ISE Sentiment 128.00 -21.47%
US Dollar 84.10 -.37%
CRB 302.53 -.59%

Futures Spot Prices
Crude Oil 52.65 -1.26%
Unleaded Gasoline 152.60 -.69%
Natural Gas 7.21 -.44%
Heating Oil 146.40 -2.22%
Gold 430.40 +.37%
Base Metals 130.61 +.71%
Copper 152.60 +1.23%
10-year US Treasury Yield 4.44% -.54%

Leading Sectors
Tobacco +1.34%
Biotech +.71%
Oil Service +.43%

Lagging Sectors
I-Banks -.62%
Gold & Silver -.70%
Restaurants -.88%

BOTTOM LINE: US stocks are slightly lower mid-day on worries over slowing growth. The Portfolio is substantially higher on gains in my Chinese ADR shorts, Software longs and Base Metal shorts. I exited a few trading longs in the Tech sector this morning, thus leaving the Portfolio’s market exposure Market Neutral. The tone of the market is modestly negative as the advance/decline line is lower, sector performance is mixed and volume is very light. Small-caps, Cyclicals and Tech are underperforming, while measures of investor anxiety are mixed. Today’s overall market action is modestly negative, considering the decline in long-term interest rates, the market’s oversold state, light volume and stabilizing energy prices. The fact that most commodity prices are falling again, even with a decline in the US dollar, is a positive. Oil is likely to continue bouncing in the near-term as sentiment became too negative. However, new highs in crude are unlikely and I continue to expect a meaningful decline in energy prices over the intermediate-term. I expect US stocks to decline modestly into the close on continuing worries over slowing global growth and a bounce in energy prices.

Today's Headlines

Bloomberg:
- President Vladimir Putin’s control over industries such as oil and machinery and the government’s reluctance to allow foreigners to buy majority stakes in Russian companies is hurting economic growth.
- Merrill Lynch unseated Morgan Stanley at the top of the lucrative market for stock sales in the first quarter and may get an additional boost from its rival’s persistent feuding with former executives.
- Microsoft agreed to pay Gateway $150 million over four years to resolve legal claims.
- Crude oil is falling for a sixth consecutive day, the longest decline since October 2003, on signs that refiners will have sufficient supply to make gasoline during the peak demand months of summer.
- Lazard Ltd. plans to sell shares to the public for as much as $27 each, valuing the company’s parent at about $3.9 billion.
- Ford Motor’s shares and bonds fell after CEO William Clay Ford Jr. cut the company’s 2005 profit forecast amid plunging sales of US pickups and sport-utility vehicles.

The Wall Street Journal:
- American International Group Chairman Maurice Greenberg used the private investment partnerships CV Starr and Starr International to reward favored executives.
- Ameritrade Holding, E*Trade Financial and Charles Schwab shares have fallen this year as a price was has broken out in the discount brokerage business.
- US apartment vacancy rates fell and rents rose in the first quarter of 2005, in the strongest performance for dwelling owners since 2001.
- Cablevision Systems will decide this week whether to raise its $16.5 billion bid for Adelphia Communication’s cable-television assets.
- Apple Computer faces growing competition from cell-phone companies and wireless carriers moving into the market for mobile music.
- Most stock analysts who suggested selling a particular company’s shares erred in past years, as a large number of sell recommendations did better than stocks carrying a “buy” or “hold” advisory.

NY Times:
- Vivendi Universal SA, Take-Two Interactive Software and eight other major video game publishers plan to incorporate product marketing in more than 40 games this year.

USA Today:
- The Fed can keep to its strategy of raising interest rates in a “slow, methodical” way as long as inflation remains tame, said Anthony Santomero, president of the Federal Reserve Bank of Philadelphia.

Xinhua News Agency:
- China’s crude oil imports fell 1.7% in the first three months of the year.
- China’s steel-product imports fell 41% in the first three months of the year.

AFP:
- China will support India’s bid for permanent membership of an expanded UN Security Council.

Project Finance International:
- A group of 10 private Chinese oil companies will merge to form a $1.2 billion competitor to PetroChina and the country’s two other large oil producers.

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

Economic Releases

None of note

Morning Buy/Sell Recommendations

Goldman Sachs:
• Reiterated Outperform on BLS, CZN, AMX and TU.

Smith Barney:
• Reiterated Buy on WMT, target $65.
• Reiterated Buy on Semi Equipment stocks, favorites are AMAT, MYK, WFR and LRCX.
• Upgraded ARE to Buy, target $75.
• Upgraded PLD to Buy, target $42.
• Reiterated Buy on ESV, target $48.
• Reiterated Buy on GSF, target $44.
• Reiterated Buy on NE, target $65.
• Reiterated Buy on IRF, target $65.
• Reiterated Sell on ABT, target $39.

Morgan Stanley:
• Downgraded IGT to Underweight.

JP Morgan:
• Added KCI to Focus List.

Banc of America:
• Upgraded BMET to Buy, target $47.

Lehman Brothers:
• Upgraded HGSI to Buy.

Prudential:
• Reiterated Overweight on IBM, target $111.
• Reiterated Underweight on NCX, target $37.
• Reiterated Overweight on LYO, target $24.
• Reiterated Underweight on F, target $9.
• Reiterated Overweight on WY, target $84.

Legg Mason:
• Reiterated Buy on SRX, target $69.
• Reiterated Buy on CTSH, target $51.

Piper Jaffray:
• Raised CECO to Outperform, target $45.

Deutsche Bank:
• Cut F bonds to Sell.

Raymond James:
• Reiterated Strong Buy on BHE, target $44.

Thomas Weisel:
• Reiterated Outperform on CERN, target $60.