Mid-day Scoreboard

Indices
S&P 500 1,177.11 -.90%
DJIA 10,441.28 -.64%
NASDAQ 1,981.76 -1.17%
Russell 2000 604.91 -1.32%
DJ Wilshire 5000 11,586.50 -.93%
S&P Barra Growth 568.20 -.82%
S&P Barra Value 604.37 -1.0%
Morgan Stanley Consumer 585.65 -.15%
Morgan Stanley Cyclical 731.76 -1.55%
Morgan Stanley Technology 446.57 -1.37%
Transports 3,563.20 -2.28%
Utilities 367.55 -.62%
Put/Call .79 -33.05%
NYSE Arms 1.45 +50.50%
Volatility(VIX) 12.42 +9.91%
ISE Sentiment 183.00 +16.56%
US Dollar 84.45 +.01%
CRB 300.51 -.69%

Futures Spot Prices
Crude Oil 50.85 +1.25%
Unleaded Gasoline 148.20 -3.44%
Natural Gas 7.07 +1.39%
Heating Oil 147.60 +2.36%
Gold 425.60 -1.25%
Base Metals 123.55 -1.46%
Copper 142.85 -2.12%
10-year US Treasury Yield 4.36% +.19%

Leading Sectors
Drugs +.78%
Energy +.20%
Broadcasting +.10%

Lagging Sectors
HMOs -3.75%
Airlines -3.78%
Steel -6.20%

BOTTOM LINE: US stocks are lower mid-day on continuing worries over slowing growth and a bounce in energy prices. The Portfolio is higher on gains in my Oil Tanker, Steel and Chinese ADR shorts. I added a few new shorts this morning, thus leaving the Portfolio Market Neutral. One of my new shorts is OMM and I am using an $18.5 stop-loss on this position. The tone of the market is negative as the advance/decline line is very weak, almost every sector is lower and volume is above-average. Measures of investor anxiety are mixed. However, the AAII % Bulls plunged to 16.5% this week, the lowest level since Sept. 4, 1992. This is a very positive development. Today’s overall market action is negative, considering the continuing decline in commodity prices, the market’s oversold state and the rising US dollar. While the extent of the market’s recent weakness caught me off guard, things continue to shape up very well for a much better second half of the year. I continue to expect lower energy prices, low interest rates and modestly improving employment prospects to boost economic growth and stocks prices over the intermediate-term. I expect US stocks to trade mixed into the close as higher energy prices offset bargain-hunting.

Today's Headlines

Bloomberg:
- General Reinsurance Australia Ltd., a unit of Warren Buffett’s Berkshire Hathaway, will be investigated by Australia’s insurance regulator over its reinsurance practices.
- Copper fell to an eight-week low in London on speculation that production from mines and smelters may catch up with demand in China.
- German Chancellor Gerhard Schroeder said he is determined to see the European Union’s 16-year-old arms embargo on China lifted, dismissing criticism from lawmakers in his own coalition and opposition parties.
- Southwest Airlines said first-quarter profit almost tripled as the airline added flights and carried more passengers.
- UnitedHealth Group said first-quarter profit rose 41% as the company added customers through acquisitions.
- Stephen Cutler, who spearheaded the SEC’s crackdown on the corporate fraud and trading scandals that rattled US investors following the collapse of Enron Corp., is resigning as the agency’s enforcement chief.
- US indictments in the UN/Iraq oil-for-food program charged three people and two companies with scheming to pay kickbacks to former Iraqi dictator Saddam Hussein.

The Wall Street Journal:
- Intel and Advanced Micro Devices, which will soon offer “dual-core” semiconductors need modifications in personal computer programs if the chips’ potential is to be fully exploited.
- Benchmark steel prices have dropped for six straight months in the US, as demand for steel is slowing because of the weakening US car industry and slowing economic growth in China.
- China said it has “never, and will never” recognize the boundary market drawn by Japan in an area of the East China Sea, which is claimed by both countries, a day after the Japanese government allowed oil and gas drilling.
- Callaway Golf, TaylorMade Golf and Nike Golf have been asked by the US Golf Assoc. to supply prototype balls that fly shorter distances than the current ones.

Financial Times:
- China’s leaders are preparing to end the yuan’s peg of 8.28 to the dollar.

NY Times:
- Neiman Marcus Group, Saks Inc. and other retailers may not have a better time to put themselves up for sale as interest rates rise and billions of dollars in investments wait spending.

Nihon Keizai:
- Sony Corp. seeks to sell more than 1 million liquid crystal display television sets in Europe this year, triple the number of last year.

Economic Releases

- Initial Jobless Claims fell to 330K last week versus estimates of 330K and 340K the prior week.
- Continuing Claims fell to 2664K versus estimates of 2651K and 2686K prior.
- Business Inventories for February rose .5% versus estimates of a .5% increase and a .9% gain in January.

Morning Buy/Sell Recommendations

Goldman Sachs:
- Reiterated Outperform on BSX and Underperform on UIS.

Smith Barney:
- Sees modest EPS upside at TYC, EMR, ROK and CBE.
- Reiterated Buy on NMG/A and JCP.
- Reiterated Buy on LPX, target $33.
- Reiterated Buy on LRCX, target $38.
- Said to Buy Semi Equipment stocks aggressively on pullback.
- Reiterated Buy on ROP, target $79.
- Reiterated Sell on GM, target $24.
- Reiterated Buy on BIIB, target $42.

Merrill Lynch:
- Raised RHI to Buy, target $32.
- Raised GDW to Buy, target $73.
- Raised CFC to Buy, target $43.
- Cut DRL to Sell.

Lehman Brothers:
- Raised STJ to Overweight, target $43.
- Rated SAFC, CB, ALL Overweight and MMC, AOC Underweight.

Oppenheimer:
- Raised BXG to Buy, target $17.
- Rated VLI Buy.
- Rated EPD Buy.
- Rated MMP Buy.

JP Morgan:
- Reiterated Overweight on SBL, NVTL, PTEN.
- Cut BBY to Underweight.

CSFB:
- Raised QCOM to Outperform, target $45.

Bear Stearns:
- Rated KERX Outperform, target $18.

UBS:
- Cut CHIR to Reduce, target $32.
- Cut NWAC to Reduce.

Prudential:
- Raised AMD to Overweight, target $25.
- Rated VFC Overweight.

CIBC:
- Rated OSTK Sector Underperform.
- Rated BIVN Sector Outperform, target $12.
- Raised MNT to Sector Outperform, target $43.

Links of Interest

Market Internals
Movers & Shakers
NYSE OrderTrac
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

Thursday Watch

Late-Night Headlines
Bloomberg:
- The US dollar is rising against the yen and euro after the International Monetary Fund said the US economy will outpace the euro-zone and Japan this year and next.

Wall Street Journal:
- General Motors was asked to provide the SEC with documents related to transactions with Delphi Corp.

Financial Times:
- Newspaper editors should "grasp" the "fast-developing reality" of the effect of growing Internet use on the print industry, citing News Corp. Chairman Rupert Murdoch.

China Daily:
- China aims to triple trade with Arab states in the next five years.

Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on GE and DHR.

Night Trading
Asian Indices are -1.25% to -.25% on average.
S&P 500 indicated +.01%.
NASDAQ 100 indicated +.03%.

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
SCH/.12
CREE/.25
DRL/.81
DJ/.10
ETN/1.23
EMMS/-.02
FDC/.50
FITB/.73
GTK/.33
JBHT/.51
LSTR/.27
PEP/.50
PGR/1.89
RMBS/.05
LUV/.05
SUNW/.00
UNH/1.13

Splits
None of note

Economic Releases
8:30 EST
- Initial Jobless Claims for last week are estimated to fall to 330K versus 334K the prior week.
- Continuing Claims are estimated to fall to 2651K versus 2688K prior.
- Business Inventories for February are estimated to rise .5% versus a .9% increase in January.

BOTTOM LINE: Asian indices are lower as exporters in the region decline on fears over slowing demand. I expect US equities to open modestly higher on a bounce from today's sell-off, however stocks may weaken later in the day on continuing worries over slowing growth. The Portfolio is 25% net long heading into tomorrow.