Mid-day Scoreboard

Indices
S&P 500 1,180.75 +.39%
DJIA 10,453.15 +.31%
NASDAQ 1,996.60 +.28%
Russell 2000 614.53 +.13%
DJ Wilshire 5000 11,576.77 +.38%
S&P Barra Growth 569.68 +.45%
S&P Barra Value 607.08 +.40%
Morgan Stanley Consumer 580.96 +.96%
Morgan Stanley Cyclical 743.49 +.14%
Morgan Stanley Technology 453.85 -.07%
Transports 3,724.74 +.48%
Utilities 363.62 +.68%
Put/Call .83 -4.60%
NYSE Arms .81 -22.68%
Volatility(VIX) 13.71 -2.83%
ISE Sentiment 179.00 +7.83%
US Dollar 84.81 +.04%
CRB 309.09 -.33%

Futures Spot Prices
Crude Oil 56.15 -1.42%
Unleaded Gasoline 169.20 -1.72%
Natural Gas 7.49 -1.30%
Heating Oil 162.40 -1.11%
Gold 430.426.80 +.19%
Base Metals 127.35 -.45%
Copper 148.50 -.67%
10-year US Treasury Yield 4.47% +.46%

Leading Sectors
Airlines +2.64%
Papers +2.50%
Drugs +2.01%

Lagging Sectors
Energy -.37%
Networking -.61%
Software -.84%

BOTTOM LINE: US stocks are modestly higher mid-day on optimism over falling energy prices. The Portfolio is unchanged again as gains in my Computer and Retail longs are offsetting losses in my Software longs and Base Metal shorts. I have not traded today, thus leaving the Portfolio’s market exposure at 50% net long. The tone of the market is modestly positive as the advance/decline line is slightly higher, sector performance is mostly positive and volume is light. Defensively oriented Consumer stocks are outperforming again, while Tech is underperforming and measures of investor anxiety are lower. Today’s overall market action is modestly negative considering the pullback in energy prices and the market’s oversold state. Greenspan just referred to energy prices as being “frenzied”, which implies he believe current levels are unsustainable. The CRB Index is breaking down through its recent parabolic uptrend even with energy near highs, which is also a positive. I expect US stocks to trade mixed into the close as optimism over falling energy prices is offset by concerns over slowing global growth.

Today's Headlines

Bloomberg:
- OPEC may raise its production to 30 million barrels a day, or as much as 95% of the group’s capacity.
- The US won allies in the European Parliament in a bid to defeat French and German attempts to end the European Union’s 15-year embargo on the sale of weapons to China.
- Oil and metals prices may fall as US consumer spending slows, ending a rally similar to the technology-stock bubble that burst in 2000.
- Greenhill Capital Partners LLC, the investment unit of merger and restructuring advisers Greenhill & Co., raised $558 million for its second US buyout fund.
- Pfizer said earnings will fall to $8.6 billion because of no revenue growth and expenses related to restructuring and repatriated profits.
- High gas prices aren’t causing most consumers to cut back on spending on clothes, electronics, and other goods, a private survey found.

Wall Street Journal:
- Google, Yahoo and other Internet companies are accused of complicity in overcharging for ads, so-called “click fraud,” by a group of advertisers.
- Spain’s sale of arms to Columbia and Venezuela has added to strains in US-Spanish relations following Madrid’s decision to pull its troops out of Iraq last year.
- The SEC will vote tomorrow on new rules governing stock trading in the US.
- AIG, Chubb, Liberty Mutual and other major US insurers have dropped support for a $140 billion federal trust fund to pay asbestos-related claims.
- ChevronTexaco, Exxon Mobil and Royal dutch/Shell will jointly develop several natural gas fields off Australia.
- Google’s customers will be able to see driving directions and pinpoint locations on detailed satellite maps starting today.
- Quiksilver, which makes surf-inspired clothing and sells under the brands Roxy and Radio Fiji, risks alienating hip customers by trying to boost sales by becoming a broader “lifestyle” company.
- Caterpillar and Gannett’s shareholders will vote next week whether to switch to majority voting from plurality voting in its board selection procedures.
- Turnover among Chief Financial Officers of Fortune 500 companies increased 23% in 2004 from the year before.
- US carmakers and the Canadian government are expected to say today that they have reached an agreement to reduce global-warming emissions from autos and trucks they sell in Canada.
- US regulators plan to widen their probe of contracts that mix insurance and financing techniques after they complete an investigation of such transactions at AIG.

The New York Times:
- As many as 800 US remote-controlled defense aircraft are being flown in Iraq and Afghanistan, up from less than 10 four years ago.
- Coca-Cola is attempting to improve its marketing and development of new beverages, as the company seeks to lure traditional soda drinkers that may switch to other drinks.

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

Analyst Actions
Macro Calls

Tuesday Watch

Late-Night Headlines
Bloomberg:
- Federal prosecutors are seeking to schedule a trial for former Enron Corp. Chairman Ken Lay on bank fraud charges as soon as next month, at least 6 months before his separate trial on broader fraud and conspiracy charges stemming from Enron's collapse.
- The Shanghai and Shenzhen stock exchanges will start a unified benchmark index that will include China Petroleum & Chemical Corp., Asia's largest oil refiner, and Baoshan Iron & Steel Co., a unit of the world's sixth-largest steelmaker.

Financial Times:
- Kohlberg Kravis Roberts is among a group of three private equity firms which may have offered $1.3 billion for 60% of General Motors' commercial mortgage unit.

Wall Street Journal:
- Goldman Sachs Group acquired a 24-story office tower in Shanghai for $107.6 million from Singapore's CapitaLand.

South China Morning Post:
- The Vatican plans to cut diplomatic ties with Taiwan to resume relations with China.

Chosun Ilbo:
- North Korea told China that it was agreeing "in principle" to resume six-nation talks over its nuclear weapons program.

Late Buy/Sell Recommendations
None of note

Night Trading
Asian Indices are -.25% to +.50% on average.
S&P 500 indicated +.12%.
NASDAQ 100 indicated +.13%.

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
AM/.47

Splits
COH 2-for-1
CMTL 3-for-2
ORCT 3-for-1

Economic Releases
None of note

BOTTOM LINE: Asian indices are mostly higher as a decline in energy prices spurred shares in the region. I expect US equities to open modestly higher in the morning on a follow-through from today's afternoon strength and stabilizing energy prices. The Portfolio is 50% net long heading into tomorrow.