Mid-day Scoreboard

Indices
S&P 500 1,177.65 -.30%
DJIA 10,414.79 -.33%
NASDAQ 1,980.10 -.60%
Russell 2000 604.96 -.36%
DJ Wilshire 5000 11,586.81 -.37%
S&P Barra Growth 567.75 -.36%
S&P Barra Value 606.90 +.03%
Morgan Stanley Consumer 584.03 +.22%
Morgan Stanley Cyclical 737.69 -.29%
Morgan Stanley Technology 449.08 -.54%
Transports 3,609.42%
Utilities 368.36 +.56%
Put/Call 1.32 +29.41%
NYSE Arms 1.10 +8.96%
Volatility(VIX) 12.16 +1.50%
ISE Sentiment 155.00 +6.90%
US Dollar 84.58 +.44%
CRB 303.15 -.34%

Futures Spot Prices
Crude Oil 52.53 -2.35%
Unleaded Gasoline 154.00 -.63%
Natural Gas 7.14 -2.24%
Heating Oil 147.25 -.98%
Gold 429.30 -.26%
Base Metals 129.60 -.77%
Copper 149.30 -2.10%
10-year US Treasury Yield 4.44% +.28%

Leading Sectors
Insurance +.16%
Homebuilding -.10%
Foods -.24%

Lagging Sectors
Steel -2.30%
Airlines -2.59%
Oil Service -2.69%

BOTTOM LINE: US stocks are higher mid-day on declining long-term interest rates and falling energy prices. The Portfolio is slightly lower on losses in my Base Metal and Chinese ADR shorts. I exited a number of shorts today and added some Homebuilding, Tech and Retail longs, thus leaving the Portfolio 75% net long. The tone of the market is modestly positive as the advance/decline line is slightly higher, sector performance is mixed and volume is modest. Tech and Energy-related stocks are underperforming, while measures of investor anxiety are mostly higher. Today’s overall market action is positive, considering the shift in psychology. I believe now that it is very possible the market has seen its lows for the year as I sense a definite shift with respect to the direction of commodity prices, inflation and interest rates. I expect US stocks to rise into the close on falling long-term interest rates and lower energy prices.

Today's Headlines

Bloomberg:
- The International Energy Agency said slowing growth in Chinese oil demand, rising inventories and increasing production in the Middle East should help lower oil prices from near record highs.
- US gasoline supplies will be sufficient during the summer driving season because of increased output from refineries and “ample” amounts of stocks available from Europe.
- Fifteen current and former NYSE specialists were indicted on criminal charges of fraudulent and improper trading.
- Crude oil is falling for the sixth day in seven after the IEA lowered its forecast for world oil demand for the first time in four months.
- The recording industry said it plans to sue more than 400 unidentified people associated with US universities tomorrow for using a closed computer network to illegally send movies and music over the Internet.
- The US dollar is rising versus the euro and the yen on speculation minutes from the Fed’s March 22 meeting to be released today will suggest the central bank will keep raising interest rates.
- Estee Lauder signed fashion designer Tom Ford, who turned Gucci Group NV into a global luxury brand, to develop beauty products that appeal to younger shoppers.

Wall Street Journal:
- The governors of 33 US states are urging the expansion of a directive on use of ethanol as a fuel additive.
- The US District Court in Manhattan will probably approve arrangements to compensate investors who bought shares lauded by analysts during the dot-com bubble by the end of the week.
- Raytheon is developing “gesture” technology for the US military that moves information and images on a computer screen with the flick of the finger.
- Several US companies, including Becton Dickinson and Johnson & Johnson, will soon step into a politically charged arena as they pursue plans to study stem cells drawn from early-stage human embryos.
- Ameritrade, E*Trade and Charles Schwab are trying to offer more banking services, to attract customers interested in one-stop shopping for financial services.

Washington Post:
- Berkshire Hathaway Chairman Warren Buffett told federal and NY state investigators that he was briefed on an illegal transaction between Berkshire unit General Re and AIG.

WNBC-TV New York:
- Three men have been charged in connection with last August’s purported plot to attack financial centers in New York and New Jersey.

Reuters:
- Intel said yesterday it’s started shipping the first of a new line of dual-core semiconductors, which improve desktop computer performance with separate processing units.

Interfax:
- Russia and NATO will jointly develop an anti-missile system to deploy in Europe.

El Watan:
- Algeria, the second largest oil producer in North Africa, plans to boost output at its largest oilfield by 50% as it seeks to meet the soaring demand for crude.

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

- The Trade Balance for February fell to -$61.0B versus estimates of -$59.0B and -$58.5B in January.

Morning Buy/Sell Recommendations

Goldman Sachs:
- Reiterated Outperform on DNA, COF and GCI.
- Reiterated Underperform on PBG.

Smith Barney:
- Reiterated Buy on DNA, target $87.50.
- Reiterated Sell on IMCL, target $36.
- Reiterated Buy on CELG, target $41.
- Reiterated Buy on LRCX, target $38.

Morgan Stanley:
- Raised TLWT to Overweight, target $23.

JP Morgan:
- Cut WDC to Underweight.
- Rated GBBK Underweight.
- Raised SHW to Overweight.
- Rated PCBC Overweight.

Banc of America:
- Rated ALB Buy, target $41.

CSFB:
- Downgraded SKS to Underperform, target $14.

CIBC:
- Raised NICE to Sector Outperform, target $46.

Legg Mason:
- Rated WYNN Buy, target $80.

Merrill Lynch:
- Raised CUNO to Buy, target $60.
- Raised CSCO to Buy and added to Focus 1 stock list.

UBS:
- Rated URS Buy, target $45.
- Rated MHS Buy, target $67.
- Raised UGI to Buy, target $56.
- Reiterated Buy on OTEX, target $22.
- Reiterated Reduce on BMC, target $14.

Bear Stearns:
- Reiterated Outperform on HET, target $83.

Prudential:
- Reiterated Overweight on PD, target $137.

Tuesday Watch

Late-Night Headlines
Bloomberg:
- Mentor Corp. and Inamed got doctors' support at a hearing today before US government advisors who will decide whether the companies' silicone breast implants are safe enough to end a 13-year ban on the devices.

Wall Street Journal:
- Northwest Airlines is close to an agreement to buy 18 Boeing 787 Dreamliner jets, whose list prices total about $2.1 billion.

Financial Times:
- China has drafted regulations to tighten control on government purchases of software developed by overseas companies.

Lloyd's List:
- Nasdaq Stock Market expects as many as 10 Greek shipowners to sell shares and list on its exchange this year.

Advertising Age:
- Sirius Satellite Radio expects to increase advertising sales to $100 million in 2007 from $1 million last year.

Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on SLB and Underperform on GPI, BMC.

Night Trading
Asian Indices are -.50% to +.25% on average.
S&P 500 indicated -.01%.
NASDAQ 100 indicated +.07%.

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
ABT/.58
AMTD/.16
CEN/.21
GCI/1.05
TZOO/.14

Splits
TTWO 3-for-2

Economic Releases
8:30 EST
- The Trade Balance for February is estimated to fall to -$59.0B versus -$58.3B in January.

2:00 EST
- Minutes of March 22 FOMC Meeting
- The Monthly Budget Statement for March is estimated to rise to -$69.3B versus -$72.7B in February.

BOTTOM LINE: Asian indices are mixed as gains in India are being offset by losses in China. I expect US equities to open modestly lower on a bounce in long-term interest rates and energy prices. The Portfolio is Market Neutral heading into tomorrow.