Mid-day Update

S&P 500 1,137.14 +.50%
NASDAQ 1,957.38 +.78%

Leading Sectors
Disk Drives +3.0%
Iron/Steel +2.42%
Computer Services +2.07%

Lagging Sectors
Papers -.33%
Oil Service -.67%
Homebuilders -2.50%

Other
Crude Oil 49.85 -.54%
Natural Gas 6.74 -.47%
Gold 415.20 -1.42%
Base Metals 120.02 -.03%
U.S. Dollar 88.48 +.98%
10-Yr. T-note Yield 4.19% +.14%
VIX 13.37 +4.86%
Put/Call .80 -15.79%
NYSE Arms .57 +23.91%

Market Movers
SEBL+15.0% after raising 3Q guidance.
BRCM +3.5% after announcing a new family of system-on-a-chip processors targeted at data networking and communications applications.
VAR +19.2% after saying net orders in its oncology systems business grew more than 20% in 4Q.
HTCH +14.2% after raising 4Q guidance substantially.
AKS +15.8% after it said it would increase prices on "nearly all" its contracts and JP Moran added it to their "equity focus list."
NUE +4.4% on AKS news.
TZOO +8.5% on short-squeeze.
MSTR +7.5% on SEBL news.
PRAA +12.5% after acquiring the assets of IGS Nevada and saying it will increase 05 earnings.
SDS +12.1% after saying it will spin off its division that helps customers keep access to their information and reiterating 04 outlook.
HYSL +6.85% after saying Olympus is using its software to increase profitability and build more accurate forecasts.
NTY +10.8% beating 4Q outlook substantially.
NUS -26.9% after lowering 3Q/4Q guidance.
CECO -5.6% on Bank of America downgrade to Neutral.

Economic Data
Factory Orders for August fell .1% versus estimates of a .1% gain and an upwardly revised 1.7% increase in July.

Recommendations
Goldman Sachs reiterated Outperform on AMGN, BBY, KRB, PAYX, AA, HOT, FS, IGT, STN, AET, INTC, AMD, MSFT, CZN, FON, CAL, WMT, FD, ADP, CEN, DEX, N, Goldman reiterated Underperform on DJ, LVLT and MKL. Citi SmithBarney said to Buy GP, LPX and WY. Citi reiterated Buy on ETR, target $65. Citi reiterated Buy on WMT, target $65. Citi reiterated Buy on HCA, target $48. Citi reiterated Buy on AMT, target $19. Citi reiterated Buy on SSI, target $54. ALV raised to Overweight at Morgan Stanley, target $45. GG cut to Sector Underperform at CIBC, target $14. PHRM rated Buy at Bank of America, target $74. MCRL cut to Sell at Deutsche Bank, target $8. WON raised to Outperform at Thomas Weisel. LPNT raised to Buy at Oppenheimer, target $40.

Mid-day News
U.S. stocks are higher mid-day on optimism over an accelerating U.S. economy. IBM updated one of its mainframe software engines, used by airlines and credit-card brands including Visa International, with the help of the Linux operating system, the NY Times said. GM plans to put $3 billion of its information technology contracts up for bid for the first time in two decades, the AP said. AtheroGenics's study showing an experimental drug significantly reduced the amount of fatty plaque that clogs blood vessels was released too early, Barron's reported. Halsey Minor, who founded Cnet Networks, plans to invest $50 million of his own money in promising technology startups, the NY Times reported. California's air quality improved this year, reversing three years of worsening pollution, the LA Times said. Members of the U.S. military favor President Bush over Senator Kerry by a 4-to-1 ratio, USA Today said, citing a survey conducted by Amy Times Publishing. Citigroup Senior Vice Chairman Rhodes, who recently returned from meetings with China's premier and central bank governor, told CNBC that the government there is committed "over time" to floating its currency. Office Depot said Chairman and CEO Nelson resigned after four years of struggles to boost sales, Bloomberg reported. Oil futures are falling on expectations U.S. refiners will increase oil inventories amid rising imports and a cease-fire by Nigerian rebels who threatened to disrupt shipments from Africa's largest crude producer, Bloomberg reported. The U.S. Supreme Court, turning away an appeal by a telemarketing trade group, refused to question the national "do not call" registry that bars unsolicited sales calls to more than 63 million phone numbers, Bloomberg reported. The rocket plane SpaceShipOne won the $10 million competition aimed at creating a space tourism industry, flying 100 kilometers to the edge of space, Bloomberg said. Factory orders fell slightly in August on lower demand for aircraft, however bookings rose for a range of consumer products such as automobiles and appliances, suggesting the U.S. economy strengthened in the third quarter, Bloomberg reported.

BOTTOM LINE: The Portfolio is substantially higher mid-day on strength in my steel, semiconductor, software and alternative energy longs. I have not traded today, thus leaving the Portfolio 125% net long. The tone of the market is relatively good today and technology stocks are retaining their leadership role. I suspect this rally has a bit further to go as shorts with large gains from the third quarter continue to take profits and longs with lagging performance put money to work before they fall too far behind to catch up.