Mid-day Update

S&P 500 1,134.93 -.02%
NASDAQ 1,954.36 +.10%

Leading Sectors
Energy +1.45%
Oil Service +.87%
Hospitals +.75%

Lagging Sectors
Insurance -1.22%
Homebuilders -1.92%
Airlines -2.28%

Other
Crude Oil 50.73 +1.68%
Natural Gas 7.18 +6.69%
Gold 420.60 +1.20%
Base Metals 120.36 +.28%
U.S. Dollar 88.23 -.17%
10-Yr. T-note Yield 4.17% +.14%
VIX 14.06 +3.80%
Put/Call .88 +6.02%
NYSE Arms 1.17 +67.14%

Market Movers
NFLX +6.8% after beating 3Q estimates.
MEDI +5.4% after Chiron(CHIR) said it won't sell any flu shots in the U.S. this year.
DPMI +44.0% after Toppan Printing Co. said it agreed to acquire it for $641 million.
TXRH +25.8% on strong demand for its IPO.
SCUR +16.3% after boosting 3Q forecast.
FILE +16.6% after Robert Baird upgrade to Outperform and saying its new FileNet Records Manager suite has been certified compliant with the U.S. Dept. of Defense.
PETD +7.6% on rising energy prices.
FRX +5.3% after beating 2Q estimates and raising 3Q guidance.
TSO +7.7% on CSFB upgrade to Outperform.
NATI -14.2% after lowering 3Q estimates and Robert Baird downgrade to Neutral.
RI -14.5% after missing 1Q estimates and lowering 2Q outlook.
EPIX -11.7% after saying the FDA has extended the action date for completion of its review of MS-325.
PHM -7.4% after cutting 3Q/04 forecast slightly.
HSIC -6.6% and halted for news pending.

Economic Data
ISM Non-Manufacturing for September fell to 56.7 versus estimates of 59.0 and a reading of 58.2 in August.

Recommendations
Goldman Sachs reiterated Outperform on IGT, RE, DELL, WMT, DIS, ENH, SII, DNA, ITT, SYMC, MERQ, AMD, CTSH, INTC and CVD. Goldman reiterated Underperform on VRSN, MRO, SAY and FRX. Citi SmithBarney said to Buy CKFR, target $39. Citi reiterated Buy on PHM, target $83. Citi reiterated Buy on NFLX, target $26. Citi reiterated Buy on HYGS, target $7.50. Citi reiterated Buy on SEBL, target $12. Citi reiterated Buy on NPSP, target $30. Citi reiterated Buy on MXRE, target $24. Citi reiterated Sell on AMD, target $12. GLG raised to Sector Outperform at CIBC, target $24. BAC rated Outperform at CSFB, target $47.50. WFC rated Outperform at CSFB, target $70. NCC rated Underperform at CSFB, target $35. VLO raised to Outperform at CSFB, target $95. TSO raised to Outperform at CSFB, target $35. FTO cut to Underperform at CSFB, target $22. RI downgraded to Underperform at Raymond James.

Mid-day News
U.S. stocks are quietly mixed mid-day as rising energy prices dampen optimism. Merck's withdrawal of the painkiller Vioxx may prompt lawsuits that focus on a Sept. 2001 warning letter sent to the company by the FDA, the Wall Street Journal reported. Developers Mills and Mack-Cali Realty will pay $160 million for the right to build a $1.3 billion retail and entertainment center at the Meadowlands Sports Complex, the Star-Ledger reported. Intel's entertainment personal computer, or EPC, is scheduled to debut next week, along with models from Hewlett-Packard and Fujitsu, the LA Times reported. Best Buy will test a health, wellness and beauty store to tap the growing market for products and services for the aging baby boomers, the Star-Tribune reported. French Prime Minister Jean-Pierre Raffarin said efforts to gain the release of two French reporters abducted in Iraq six weeks ago are at a standstill after a private initiative by a member of parliament failed, Bloomberg said. The steam spewing from Washington's Mount St. Helens is a sign that magma is near the surface and the volcano may erupt at any time, scientists said. AT&T is testing Linux software as a replacement for Microsoft's Windows operating system, Bloomberg said. Chiron, the world's second-largest seller of influenza vaccines, had its manufacturing license in the U.K. suspended for three months and won't be able to ship any batches of the vaccine, Bloomberg reported. France expelled a Muslim cleric who said the Koran allows husbands to beat adulterous wives for the second time in six months, Bloomberg said. An index of the U.S. services economy fell in September, however within the index a measure of employment increased and prices paid decreased, Bloomberg reported. L. Paul Bremer, the former top American official in Iraq, said he believes the U.S. now has enough soldiers in the country, after telling an audience that inadequate security allowed street violence to take root following the fall of Baghdad, Bloomberg said. A crackdown on telemarketing fraud resulted in the arrest of more than 100 people in the U.S. and 35 suspects in other nations this year, the Justice Dept. said. Billionaire George Soros is handing greater control of his $12.8 billion money management firm to his sons, Bloomberg reported.

BOTTOM LINE: The Portfolio is slightly higher mid-day on strength in my steel, wireless and internet longs. I have not traded today and the Portfolio is still 125% net long. Rising energy prices will likely result in mixed-to-weaker trading into the afternoon.