Mid-day Update

S&P 500 1,125.20 -.48%
NASDAQ 1,930.34 -.93%

Leading Sectors
Oil Service +.59%
Commodity +.46%
Restaurants +.38%

Lagging Sectors
Internet -1.58%
Disk Drives -2.22%
Semis -3.16%

Other
Crude Oil 52.73 +.15%
Natural Gas 7.19 -.83%
Gold 424.40 +1.17%
Base Metals 125.40 +1.84%
U.S. Dollar 87.43 -1.04%
10-Yr. T-note Yield 4.13% -2.57%
VIX 14.82 +2.21%
Put/Call .96 +12.94%
NYSE Arms 2.0 +68.07%

Market Movers
ELN -5.5% after saying European regulators may ask for data comparing their multiple sclerosis drug Antegren to another available treatment in a so-called head-to-head study.
ANF +4.0% on Wells Fargo upgrade to Hold.
MANH -20.3% after lower 3Q estimates.
BCSI -13.5% after saying its CFO will step down to pursue other opportunities.
ADBL -10.6% after announcing $125M shelf registration.
GTI -14.6% after lowering 3Q estimates and Jefferies downgrade to Hold.
ZOLL -6.6% after lowering 4Q estimate and Adams Harkness downgrade to Market Perform.

Economic Data
Unemployment Rate for September was 5.4% versus estimates of 5.4% and 5.4% in August.
Average Hourly Earnings for September rose .2% versus estimates of a .3% rise and an increase of .3% in August.
Change in Non-farm Payrolls for September was 96K versus estimates of 148K and 128K in August. Last 12 months revised higher by 236K.
Change in Manufacturing Payrolls for September was -18K versus estimates of 10K and a gain of 4K in August.
Wholesales Inventories for August rose .9% versus estimates of a .8% rise and a 1.5% increase in July.

Recommendations
SBUX raised to Buy at UBS, target $56. DNA raised to Outperform at CSFB, target $65. RNR and MXRE cut to Underweight at Morgan Stanley. KLAC rated Overweight at Prudential, target $55. LRCX rated Overweight at Prudential, target $29. BRKS rated Underweight at Prudential, target $13. NVLS rated Underweight, target $25. Goldman Sachs reiterated Outperform at AMD, BIIB, IP, GE, BVF, YHOO, TPX, MDT, AA, Goldman lowered GPI to Underperform. Goldman reiterated Underperform on T. Citi SmithBarney said to Buy EEFT ahead of earnings, target $23. Citi reiterated Buy on WMT, target $65.

Mid-day News
U.S. stocks are lower mid-day on worries over the affects of oil on economic growth and concerns about tonight's Presidential debate. Google's new search engine, which lets customers search book pages online, could shift the balance of power between the makers and sellers of books, the NY Times said. More than 50 U.S. senators are urging SEC Chairman Donaldson to delay a rule forcing companies to count stock options as a business expense, the NY Times reported. Investcorp SA agreed to buy Thomson Media, which publishes American Banker and Bond Buyer, for $350 million in cash, Dow Jones reported. IBM CEO Palmisano expects an increase in technology-related capital spending of at least 8% in 2005 after a 4-7% gain this year, Reuters reported. General Electric said third-quarter profit rose as acquisitions and economic growth spurred the biggest quarterly sales increase in four years, Bloomberg reported. Afghanistan's election tomorrow, after 22 years of war, is likely to return Interim President Karzai to power, Bloomberg said. More California voters say their state is headed in the right direction for the first time in four years under Governor Schwarzenegger, who has the support of almost two-thirds of voters, Bloomberg reported. Krispy Kreme said the SEC opened a formal investigation of the company's accounting practices, Bloomberg said. Procter & Gamble said the skin patch it is developing to boost the sex drive of women who have had both ovaries removed may work for some post-menopausal women, Bloomberg said. U.S. employers added 96,000 workers in September, fewer than expected. However, the household survey showed 225,000 individuals "were not at work because of bad weather," Bloomberg reported. The Labor Dept. also said the economy gained approximately 236,000 more jobs than originally thought for the 12 months ended in March. The U.S. economy has now created roughly 2 million jobs since last August, Bloomberg reported. Crude oil in NY was little changed after the Louisiana Offshore Oil Port shut because of rough seas, limiting the arrival of supplies to the U.S., Bloomberg reported. U.S. education officials in six states were warned last month that a computer disk found in Iraq this summer contained details about their school districts, the AP reported.

BOTTOM LINE: The Portfolio is lower mid-day on weakness in my steel, alternative energy and software longs. I have not traded today and the Portfolio is still 50% net long. The employment report was about what I expected considering the affects from the record-setting hurricanes. The unemployment rate would likely have dropped if it were not for the storms. Measures of investor anxiety are rising and long-term interest rates are falling, which are positives. I expect U.S. stocks to remain mixed-to-higher into the close as short-covering and optimism over GE's report offsets rising energy prices.