Mid-day Update

S&P 500 1,100.54 -.28%
NASDAQ 1,936.81 +.20%

Leading Sectors
Airlines +3.28%
Semis +2.48%
Software +2.25%

Lagging Sectors
Telecom -1.61%
HMOs -1.68%
Disk Drives -2.98%

Other
Crude Oil 54.40 -.02%
Natural Gas 7.82 +2.45%
Gold 424.90 +.02%
Base Metals 113.84 +1.05%
U.S. Dollar 85.97 -.44%
10-Yr. T-note Yield 3.98 -.05%
VIX 15.05 +1.28%
Put/Call .85 -2.30%
NYSE Arms 1.30 +17.12%

Market Movers
VRSN +18.7% after beating 3Q estimates, raising 4Q outlook and 05 guidance.
CTXS +12.9% after beating 3Q estimates and raising 4Q guidance.
ALTR +6.0% after beating 3Q estimates.
ALGN -32.0% after missing 3Q estimates.
EBAY +7.0% after beating 3Q estimates and giving positive guidance.
RST +23.7% after Blackstone Group LP agreed to buy it for about $1.25 billion.
AVCT +15.3% after beating 3Q estimates.
GOOG +4.7% on optimism over 3Q report after the close.
MHK +7.4% after beating 3Q estimates substantially and reiterating 4Q guidance.
LM +9.4% after beating 2Q estimates.
CAI +7.9% after beating 1Q estimates and raising 2Q outlook.
SYMC +7.5% after beating 2Q estimates, announcing 2-for-1 split and boosting stock buyback program.
MACR +12.7% after beating 2Q estimates and raising 3Q outlook.
CTXS +12.3% after beating 3Q estimates and raising 4Q guidance.
ALDN +12.8% after beating 3Q estimates and raising 4Q guidance.
WSH +7.3% after saying the company found no evidence of bid-rigging that rival Marsh & McLennan was accused of last week.
IMN -14.3% after missing 3Q estimates and lowering 4Q outlook.
DV -26.0% after missing 1Q estimates and multiple downgrades.
ADS -14.3% after missing 3Q estimates and lowering 04 outlook.
CDI -14.6% after missing 3Q estimates and multiple downgrades.
S -7.8% after missing 3Q estimates and lowering 04 outlook.
RARE -7.4% after meeting 3Q estimates and lowering 4Q and 1Q guidance.

Economic Data
Initial Jobless Claims for last week were 329K versus estimates of 345K and 354K the prior week.
Continuing Claims for last week were 2798K versus estimates of 2840K and 2806K prior.
Leading Indicators for September fell .1% versus estimates of a .1% decline and a .3% decrease in August.
Philly Fed. for October was XX.X versus estimates of 18.0 and a reading of 13.4 in September.

Recommendations
Goldman Sachs reiterated Outperform on AMGN, BAX, UST, UNH, UPS, CAT, SYMC, HOT, CIT, IR, SUN and Underperform on VRSN, S and SGP. Citi SmithBarney upgraded INTX to Buy, target $18. Citi upgraded EBAY to Buy, target $115. Citi reiterated Buy on AMGN, target $90. Citi reiterated Buy on BRCD, target $8.25. Citi reiterated Buy on EXTR, target $11. Citi reiterated Buy on PTV, target $27. Citi reiterated Buy on NWL, target $25. Citi reiterated Buy on DIS, target $30. Citi reiterated Buy on BG, target $50. Citi reiterated Buy on BK, target $37. Citi reiterated Buy on ACL, target $77. Citi reiterated Buy on JPM, target $46. Citi reiterated Buy on MOLXA, target $32. Citi reiterated Buy on TER, target $19. Citi reiterated Buy on RYL, target $125. STI raised to Buy at Bank of America, target $74. DVA rated Buy at Bank of America, target $38. RCI rated Buy at Bank of America, target $37. MNST raised to Overweight at Morgan Stanley. STZ raised to Buy at Legg Mason, target $46. CL raised to Buy at Merrill Lynch, target $50. TDS cut to Underweight at JP Morgan. USM cut to Underweight at JP Morgan. FSL rated Underweight at JP Morgan.

Mid-day News
U.S. stocks are quietly mixed mid-day as strength in the technology sector is being offset by continuing legal worries in the insurance industry. China's government is encouraging the country's companies to invest in Canada's resource industry to obtain raw materials needed to fuel its growth, the Globe and Mail reported. Wal-Mart Stores canceled an order for a book by Jon Stewart and the writers of "The Daily Show" after executives found it contained phony, naked pictures of U.S. Supreme Court justices, the AP reported. LA City Council approved an $11 billion proposal to update LA Intl. Airport by relocating runways, adding terminals and building a central passenger check-in facility, the LA Times said. Rents in San Francisco, which dropped for the past four years, are climbing as an improving job market boosts demand for apartments, the San Francisco Chronicle said. Massachusetts will add a type of hologram and other new features to driver licenses to thwart terrorists and identify theft, the Boston Globe reported. UPS, the world's largest package-delivery company, said third-third quarter net income rose 20% to $890 million, Bloomberg reported. U.K. Prime Minister Blair will redeploy 850 troops now in southern Iraq to a region controlled by U.S. forces, Bloomberg reported. Caterpillar said third-quarter net income more than doubled as global economic improvement helped sales of its mining trucks and excavators, Bloomberg reported. The number of Americans filing first-time jobless claims declined to the lowest level in six weeks, suggesting an improving labor market, Bloomberg said. Donald Trump's Trump Hotels & Casino Resorts said it will seek Chapter 11 bankruptcy protection as part of an agreement with bondholders to reduce debt by $400 million, Bloomberg reported. The Federal Reserve Bank of Philadelphia's gauge of manufacturing in the region rose to 28.5 in October, substantially above economists' expectations, from 13.4 the month before, Bloomberg reported.

Bottom Line: The Portfolio is higher mid-day on strength in my internet, software and semi longs. I have not traded today and the Portfolio is still 125% net long. The underlying tone of the market is positive today as most stocks are higher and volume is above average. As well, most measures of investor anxiety are rising, interest rates are falling and technology stocks continue to outperform. I continue to believe the recent consolidation in the major U.S. indices is a last chance for investors to acquire stocks at discount prices this year. Equities should begin to moving meaningfully higher next week and throughout the remainder of the quarter as investors begin to anticipate an acceleration of economic growth as a result of the conclusion of the election, diminishing domestic terrorism fears, corporate tax incentives, year-end budget flushes and low interest rates. These factors should allow most companies to substantially exceed recently lowered fourth quarter estimates.