First Quarter Scoreboard*

Indices
S&P 500 1,180.59 -2.59%
DJIA 10,503.76 -2.59%
NASDAQ 1,999.23 -8.10%
Russell 2000 615.07 -5.60%
DJ Wilshire 5000 11,637.25 -2.63%
S&P Equity Long/Short Index 1,022.18 +.48%
S&P Barra Growth 569.05 -2.23%
S&P Barra Value 607.20 -2.93%
Morgan Stanley Consumer 577.86 -2.19%
Morgan Stanley Cyclical 746.99 -4.73%
Morgan Stanley Technology 455.43 -10.29%
Transports 3,715.97 -2.16%
Utilities 358.33 +6.98%
Put/Call .73 +17.74%
NYSE Arms 1.23 +2.50%
Volatility(VIX) 14.02 +5.49%
ISE Sentiment 129.00 -39.44%
AAII % Bulls 28.43 -50.69%
US Dollar 84.04 +3.96%
CRB 313.57 +10.45%

Futures Spot Prices
Crude Oil 55.28 +27.96%
Unleaded Gasoline 166.45 +35.32%
Natural Gas 7.65 +25.62%
Heating Oil 161.02 +40.14%
Gold 430.50 -2.91%
Base Metals 130.33 +3.72%
Copper 150.10 +6.27%
10-year US Treasury Yield 4.48% +6.23%
Average 30-year Mortgage Rate 6.04% +3.96%

Leading Sectors
Energy +18.12%
Hospitals +12.76%
Oil Service +12.40%

Lagging Sectors
Biotech -15.25%
Networking -18.26%
Airlines -18.48%

*1Q % Change

Thursday Close

Indices
S&P 500 1,180.59 -.07%
DJIA 10,503.76 -.35%
NASDAQ 1,999.23 -.32%
Russell 2000 615.07 +.03%
DJ Wilshire 5000 11,637.25 +.03%
S&P Barra Growth 569.05 -.32%
S&P Barra Value 607.20 +.18%
Morgan Stanley Consumer 577.86 -.30%
Morgan Stanley Cyclical 746.99 +.55%
Morgan Stanley Technology 455.43 -.61%
Transports 3,715.97 -.54%
Utilities 358.33 +1.09%
Put/Call .73 -12.05%
NYSE Arms 1.23 +116.32%
Volatility(VIX) 14.02 +2.79%
ISE Sentiment 129.00 -13.42%
US Dollar 84.05 unch.
CRB 313.57 +.82%

Futures Spot Prices
Crude Oil 55.20 -.36%
Unleaded Gasoline 166.15 -.10%
Natural Gas 7.64 -.17%
Heating Oil 161.38 -.14%
Gold 430.70 -.09%
Base Metals 130.33 +1.39%
Copper 150.25 unch.
10-year US Treasury Yield 4.48% -1.42%

Leading Sectors
Oil Service +3.11%
Disk Drives +2.11%
Energy +1.97%

Lagging Sectors
Insurance -1.24%
Airlines -1.61%
Restaurants -1.70%

After-hours Movers
PSRC +4.2% after missing 3Q estimates and raising 4Q outlook.
IPXL -4.4% after announcing that it was not able to file its Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2004.

Evening Review
Detailed Market Summary
Daily ETF Performance
Style Performance
Market Wrap CNBC Video(bottom right)
Futures Recap
S&P 500 Gallery View
Timely Economic Charts
PM Market Call
Real-time/After-hours Stock Quote
In Play

Afternoon Recommendations
Goldman Sachs:
- Reiterated Outperform on XRX.

Afternoon/Evening Headlines
Bloomberg:
- Paul Wolfowitz, the US Deputy Defense Secretary and an architect of the liberation of Iraq, was elected as the 10th president of the World Bank.
- Al-Qaeda had developed an “extensive, well-organized” biological weapons program before the wars in Afghanistan and Iraq and had the capacity to produce a “virulent” germ codenamed “Agent X,” a US presidential commission reported.
- Shares of MBIA Inc., the world’s biggest bond insurer, fell by the most in 2 ½ years after NY Attorney General Spitzer and the SEC sought new information about the company’s accounting practices.
- Illinois may require utilities to purchase 8% of their electricity from renewable resources such as wind and farm waste.
- American International Group faces higher financing costs and lower earnings after the company lost its top credit ratings because of flawed accounting.
- Google Inc. plans to boost spending on computers and equipment 57% to more than $500 million this year to develop new products and lure more visitors to its Web sites.

Fox News:
- Pope John Paul II has been given the last rites of the Roman Catholic Church because of his failing health.

Autralian:
- A Morgan Stanley real estate fund may buy Sidney’s Chifley Tower for about $541 million, making it Australia’s biggest office transaction.

BOTTOM LINE: US stocks fell modestly today after yesterday’s sharp gains and energy prices rose. The Portfolio finished lower on losses in my Base Metal shorts and Networking longs. I did not trade in the afternoon, thus leaving the Portfolio 50% net long. The tone of the market remained modestly negative into the afternoon as the advance/decline line fell slightly, sector performance stayed mixed and volume improved modestly. Energy-related stocks and Cyclicals outperformed throughout the day, while Tech underperformed and measures of investor anxiety were mostly higher. Overall, today’s market action was neutral. I expect long-term rates to decline further on tomorrow’s economic reports. Investors will likely respond favorably to this development as talk of a 50 basis point rate hike by the Fed fades into the background. I will post a 1Q Scoreboard later tonight.

Mid-day Scoreboard

Indices
S&P 500 1,180.88 -.04%
DJIA 10,506.05 -.33%
NASDAQ 1,998.14 -.38%
Russell 2000 613.77 -.18%
DJ Wilshire 5000 11,637.89 +.07%
S&P Barra Growth 569.83 -.18%
S&P Barra Value 607.60 +.24%
Morgan Stanley Consumer 578.18 -.24%
Morgan Stanley Cyclical 748.20 +.71%
Morgan Stanley Technology 456.29 -.44%
Transports 3,712.50 -.64%
Utilities 357.65 +.90%
Put/Call .79 -4.82%
NYSE Arms 1.12 +95.27%
Volatility(VIX) 13.90 +1.69%
ISE Sentiment 173.00 +16.11%
US Dollar 84.02 -.32%
CRB 315.50 +1.44%

Futures Spot Prices
Crude Oil 55.60 +3.07%
Unleaded Gasoline 164.80 +3.25%
Natural Gas 7.69 +3.08%
Heating Oil 166.80 +3.82%
Gold 430.80 +.30%
Base Metals 130.33 +1.39%
Copper 150.10 +.60%
10-year US Treasury Yield 4.50% -.98%

Leading Sectors
Oil Service +2.76%
Energy +1.75%
Commodity +1.60%

Lagging Sectors
Networking -1.02%
Restaurants -1.43%
Airlines -1.77%

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 modestly lower mid-day on worries over higher energy prices. The Portfolio is slightly lower as losses in my Base Metal shorts and Networking longs are more than offsetting gains in my Homebuilding and Software longs. I exited some Tech longs this morning as they hit stop-losses, thus bringing the Portfolio’s market exposure to 50% net long. The tone of the market is modestly negative as the advance/decline line is lower, sector performance is mixed and volume is light. Technology stocks are underperforming, while Cyclical stocks are outperforming and measures of investor anxiety are mixed. Today’s overall market action is neutral. It is a positive that stocks are maintaining yesterday’s gains for the most part even with Goldman Sachs’, the largest trader of energy derivatives, outrageous $105/bbl. spike oil call on the last day of the quarter. However, with long-term interest rates declining, I would have expected stocks to rise notwithstanding that call. I expect US stocks to trade mixed-to-higher into the close as short-covering, bargain hunting, quarter-end window-dressing and lower long-term interest rates more than offsets worries over higher energy prices.

Today's Headlines

Bloomberg:
- India’s economy grew at the slowest pace in six-quarters as below-average rainfall reduced harvests.
- French joblessness rose in February, keeping the unemployment rate at a five-year high of 10.1% which is almost double the US unemployment rate.
- The unemployment rate in Germany rose to 12.0% in March, another post WWII record, as companies eliminated jobs in response to slowing demand.
- Continental Airlines will reduce annual expenses by $418 million after the company’s pilots, dispatchers and mechanics accepted new pay and benefit agreements.
- Shares of Zimmer Holdings, Stryker and other makers of artificial hips and knees fell after federal prosecutors demanded documents related to some of the companies’ contracts with surgeons.
- Ted Koppel, anchor and managing editor of Disney’s ABC news show “Nightline,” is leaving the program when his contract expires in December.
- US Treasury notes rose after first-time claims for unemployment insurance benefits unexpectedly increased and the Fed’s most watched measure of inflation held steady.
- Crude oil is rising and gasoline and heating-oil surged to records on signs that US refineries lack capacity to make enough fuel and Goldman Sachs predicted that oil could touch $105/bbl.

The Wall Street Journal:
- Some investors are speculating that Morgan Stanley may end up selling the whole company or part of it, as it copes with a rift between CEO Purcell and former executives.
- Web sites such as those run by American Eagle Publications of Show Low, Arizona, are selling or giving away software coding for computer viruses.

Reuters:
- Intel and Bertelsmann AG will work together to develop Internet technology to download and share films, music and other files.

New York Times:
- Qwest Communications may announce a higher offer for MCI Inc. as early as today to prevent an acquisition by Verizon Communiciations.
- The threat of terrorism promoted and financed by foreign countries against the US is falling.

NY Post:
- Haggar Corp. has hired Bear Stearns to help it explore alternatives, including a possible sale.

Boston Globe:
- The Massachusetts Senate passed a bill yesterday supporting embryonic stem cell research, a setback to Governor Mitt Romney because it promotes a technique that involves cloning human cells.

Washington Post:
- Washington, DC-area officials are considering laws to reduce how much land a house and driveway can cover on a piece of property, in an effort to curb construction on over-sized residences.

Women’s Wear Daily:
- JC Penney is the target of a leveraged buyout by a group led by Cerberus Capital Management LP and the Carlyle Group.

Al-Ahram:
- Apache Corp. secured new rights to explore for oil and gas in Egypt for about $50 million.

Dagens Industri:
- Ericsson AB expects the number of mobile phone users in the Middle East to rise by as many as 36 million over the next three years.

Economic Releases

- Personal Income for February rose .3% versus estimates of a .4% increase and a 2.5% decline in January.
- Personal Spending for February rose .5% versus estimates of a .5% increase and a .1% gain in January.
- PCE Deflator for February rose 2.3% versus estimates of a 2.3% rise and a 2.2% gain in January.
- PCE Core for February rose 1.6% versus estimates of a 1.6% increase and a 1.6% increase in January.
- Initial Jobless Claims for last week rose to 350K versus estimates of 320K and 330K the prior week.
- Continuing Claims fell to 2608K versus estimates of 2650K and 2674K prior.
- The Help Wanted Index for February remained at 41 versus estimates of 41 and a reading of 41 in January.
- The Chicago Purchasing Manager report for March rose to 69.2 versus estimates of 60.5 and a reading of 62.7 in February.
- Factory Orders for February rose .2% versus estimates of a .5% increase and a 0.0% change in January.

Morning Buy/Sell Recommendations

Goldman Sachs:
- Reiterated Outperform on AIG and SYK.
- Reiterated Underperform on HRB.
- Reiterated Attractive view of Oil Service sector, favorites are RIG, DO, SII, BHI and SLB.

Smith Barney:
- Reiterated Bullish view of Managed Care companies.
- Reiterated Buy on CSGS, target $21.
- Reiterated Buy on AMT, target $22.
- Reiterated Buy on EEFT, target $38.
- Reiterated Buy on UNM, target $20.
- Reiterated Buy on JBL, target $35.
- Reiterated Buy on TXN, target $32.
- Reiterated Buy on FSLB, target $22.5.
- Reiterated Sell on SNDK, target $22.

CSFB:
- Raised FITB to Outperform, target $50.

Merrill Lynch:
- Raised ENTG to Buy, target $13.
- Raised WDC to Buy, target $16.50.

Morgan Stanley:
- Cut ELN to Underweight.
- Raised PD to Overweight, target $123.
- Rated SHO Overweight, target $25.
- Rated LQI Overweight, target $10.25.

Banc of America:
- Reiterated Sell on VECO, target $13.75.
- Reiterated Buy on BIIB, target $39.
- Reiterated Buy on AIG, target $69.

UBS:
- Raised BLS to Buy, target $30.
- Raised HPT to Buy, target $45.
- Raised HT to Buy, target $11.50.
- Rated AV Buy, target $15.

Jeffries:
- Rated BSX Buy, target $39.

Deutsche Bank:
- Rated BRCM Buy, target $38.

JP Morgan:
- Added CPB to Focus List.
- Raised WAT to Overweight.
CIBC:
- Rated COL Sector Outperform, target $56.
- Rated CW Sector Outperform, target $66.

Piper Jaffray:
- Reiterated Buy on WDC, target $16.
- Reiterated Buy on CAO, target $20.

Oppenheimer:
- Rated PYX Buy, target $11.