Mid-day Update

S&P 500 1,104.43 -.19%
NASDAQ 1,937.20 -.84%

Leading Sectors
HMOs +1.65%
Hospitals +1.55%
Utilities +1.0%

Lagging Sectors
Computer Services -1.23%
Telecom -1.35%
Semis -2.16%

Other
Crude Oil 55.29 +1.52%
Natural Gas 8.07 +4.85%
Gold 425.80 +.05%
Base Metals 112.86 -.86%
U.S. Dollar 85.95 -.09%
10-Yr. T-note Yield 4.0% +.24%
VIX 14.43 -.89%
Put/Call .64 -17.95%
NYSE Arms .85 -23.21%

Market Movers
BRCM -12.0% after beating 3Q estimates, lowering 4Q guidance and multiple downgrades.
GOOG +16.9% after beating 3Q revenue estimates substantially.
AMZN -11.4% after missing 3Q estimates and lowering 05 outlook.
ERICY -8.5% after beating 3Q estimates and raising 4Q outlook.
GILD -6.5% after beating 3Q estimates, but missing optimistic estimates.
MMC +5.2% on speculation CEO Greenberg may be forced to quit, clearing the way for settlement talks with Spitzer.
XXIA +29.1% after beating 3Q estimates and Needham upgrade to Strong Buy.
APTM +17.9% on strong 3Q results.
AFCO +12.2% after beating 1Q estimates and raising 2Q guidance.
MCK +11.23% after beating 2Q estimates substantially and JP Morgan upgrade to Overweight.
SYNA +14.0% after beating 1Q estimates and raising 2Q outlook.
TRDO +13.5% after beating 3Q estimates substantially, reiterating 4Q outlook and Morgan Keegan upgrade to Outperform.
OSTK +18.2% after beating 3Q estimates, optimism over auction biz and short-squeeze.
KAR +10.1% after beating 3Q estimates.
WEBX -18.6% after meeting 3Q estimates and lowering 4Q guidance.
EYE -12.3% after missing 3Q estimates and lowering 4Q outlook.
IFIN -14.6% after lowering 04 guidance and Hibernia Southcoast downgrade to Sell.

Economic Data
None of note.

Recommendations
Goldman Sachs reiterated Underperform on CR, T, FISV and Outperform on KLAC, GILD, AMGN, XRX, GDT, SBC, HOT, SPG, MSFT, BAX. Citi SmithBarney initiated UTSI with a Buy, target $26. Citi reiterated Buy on BLS, target $32. Citi reiterated Buy on VZ, target $43. Citi reiterated Buy on MSFT, target $33. Citi reiterated Buy on NT, target $5. Citi reiterated Buy on CEY, target $44. Citi reiterated Sell on MEDI, target $19. Citi reiterated Buy on FDRY, target $15. Citi reiterated Buy on TXT, target $78. Citi reiterated Buy on ITT, target $92. Citi reiterated Buy on ACS, target $70.

Mid-day News
U.S. stocks are modestly lower mid-day as the technology sector consolidates recent gains. The U.S. may seek to devalue the dollar against Asian currencies to ease trade deficits with China and other countries in the region, the NY Times reported. Iran's efforts to develop nuclear weapons and the capability of its missiles to reach Israel may prompt Israel to use preemptive military strikes, the LA Times said. Former U.S. President Bill Clinton wants to be secretary-general of the United Nations when Kofi Annan's term ends in 2006, UPI reported. President Bush is considering several changes to his cabinet if re-elected, including shifting National Security Adviser Condoleezza Rice to run the Defense Department, the Washington Post reported. Demand for homes prices at $1 million and above in the San Francisco Bay Area remained strong in the third quarter as people sold and traded up, the San Francisco Chronicle said. San Francisco city workers were forced to campaign for Gavin Newsom before he was elected mayor in 2003, and threatened with loss of pay if they didn't help, the San Francisco Chronicle reported. California received a shipment of 271,740 doses of flu vaccine yesterday and will begin distributing the new supply Monday to county health departments, the San Francisco Chronicle said. Nextel Communications said third-quarter sales rose 18% and it boosted its 2004 forecast, Bloomberg reported. HCA, the largest U.S. hospital chain, said third-quarter profit fell 26% as payment increases for each admission slowed and collections from uninsured patients declined, Bloomberg reported. Crude oil futures are rising in NY after the release of a report showing that the Chinese economy grew more than expected last quarter, Bloomberg said. Shares of Google surged as much as 26% after quarterly profit more than doubled and the company said the market for Internet advertising shows no signs of slowing, Bloomberg reported.

Bottom Line: The Portfolio is unchanged mid-day as significant strength in my internet and security longs is offsetting weakness in my semi and semi-equipment longs. I have not traded and the Portfolio remains 125% net long. While the tone of the market is slightly negative today, most sectors are higher outside of technology. Consolidation of recent gains in tech is warranted and healthy. As well, the action in shares of Google will likely generate more interest by the public in the overall market. Finally, it appears that investors are not as fixated on the rising price of oil which is a big positive. I expect U.S. stocks to trade mixed into the close as short-covering and bargain-hunting offset rising energy prices.