Mid-day Update

S&P 500 1,122.30 +1.01%
NASDAQ 1,964.08 +1.82%

Leading Sectors
Airlines +4.14%
Semis +2.95%
I-Banks +2.83%

Lagging Sectors
Commodity -1.40%
Energy -2.09%
Oil Service -3.14%

Other
Crude Oil 53.75 -2.66%
Natural Gas 8.12 -3.36%
Gold 425.60 -.44%
Base Metals 112.86 +1.50%
U.S. Dollar 85.33 +.14%
10-Yr. T-note Yield 4.05% +1.30%
VIX 16.02 -2.26%
Put/Call .71 -4.05
NYSE Arms .92 +64.29%

Market Movers
SINA +26.1% after beating 3Q estimates, raising 4Q guidance and multiple upgrades.
CAH +23.1% on better-than-expected 4Q earnings.
AAPL +4.1% on continued optimism over new iPod Photo.
QCOM +4.0% on optimism over upcoming earnings release.
MSTR +29.1% after substantially beating 3Q estimates, raising 4Q/05 outlooks.
LSCP +28.4% after beating 3Q estimates and raising 04/05 outlooks.
SYNT +22.2% after beating 3Q estimates substantially and raising 04 guidance.
FFIV +19.3% after beating 4Q estimates and raising 1Q guidance.
SHOP +14.9% on continuing strong demand for IPO.
TRMB +10.9% after beating 3Q estimates, lowering 4Q outlook and raising 04 guidance.
ISRG +17.2% on strong 3Q report.
ZMH +5.0% after beating 3Q estimates, raising 4Q guidance and reiterating 05 outlook.
CECO +14.5% after beating 3Q estimates and raising 4Q guidance.
AVID +7.6% on strong 3Q report.
LPNT +10.5% on strong 3Q report.
NLS -15.9% after meeting 3Q estimates and lowering 4Q guidance.
SKX -15.0% after beating 3Q estimates and lowering 4Q outlook.
NILE -17.1% after beating 3Q estimates and widening 4Q outlook.
ZBRA -9.1% after beating 3Q estimates and widening 4Q outlook.
FLS -11.9% after delaying its third-quarter results and downgrade to Sell by Hibernia Southcoast.
AFL -5.9% after meeting 3Q estimates and lowering 4Q outlook.

Economic Data
Durable Goods Orders rose .2% in September versus estimates of a .5% rise and a .3% decline in August.
Durable Goods Less Transportation rose 1.7% versus estimates of a .3% increase and a 2.8% gain in August.
New Home Sales for September were 1206K versus estimates of 1150K and 1165K in August.

Recommendations
-Goldman Sachs reiterated Outperform on AMGN, MDT, ATYT, COH, PG, NEM, AHC and GE. Goldman reiterated Underperform on FSS and AG. Goldman upgraded TMK to Outperform.
-Citi SmithBarney initiated FST with a Buy, target $38. Citi reiterated Buy on AAPL, target $60. Citi reiterated Buy on FFIV, target $45. Citi reiterated Buy on AV, target $20. Citi reiterated Buy on UTSI, target $26. Citi reiterated Buy on EOG, target $78. Citi reiterated Buyon BWA, target $50. Citi reiterated Buy on TLAB, target $11. Citi reiterated Buy on WFR, target $13. Citi reiterated Buy on FD, target $58. Citi reiterated Sell on AFL, target $40. Citi reiterated Buy on BNI, target $44.50. Citi reiterated Buy on GE, target $38. Citi reiterated Buy on PNR, target $43. Citi reiterated Buy on MRO, target $45. Citi reiterated Buy on MSTR, target $64. Citi reiterated Buy on VRTS, target $26. Citi reiterated Buy on TGT, target $50. Citi reiterated Buy on CHE, target $72. Citi reiterated Buy on AAI, target $13.
-Legg Mason raised CBMD to Buy, target $35.
-Bank of America raised GLW to Buy, target $15. Bank of America raised ZMH to Buy, target $84.
-Bear Stearns raised PHRM to Outperform.

Mid-day News
U.S. stocks are sharply higher mid-day on optimism over falling oil prices, better economic reports, stronger earnings reports, short-covering, diminishing terrorism fears and bargain-hunting. The U.S. craze for low-carb foods seems to be fading, the Wall Street Journal reported. Some Iraqi insurgents say recent anti-U.S. violence has been aimed at helping Senator Kerry defeat President Bush, in the belief that the U.S. will then lose its will to fight, the Washington Times reported. Pathmark, which operates supermarkets in New York, New Jersey and Pennsylvania, has begun talking with financial firms and competitors about a possible sale, the Deal.com reported. Rain in California has rotted some of the state's tomato crop, worsening a nationwide shortage brought about by hurricanes in Florida and a pest outbreak in Mexico, the AP reported. Red Herring magazine plans to publish twice-monthly issues in November and introduce a weekly edition by January, the San Francisco Chronicle reported. A group led by JP Morgan Chase agreed to buy U.K. drugmaker Warner Chilcott Plc for $3 billion, outbidding two other private equity firms, Bloomberg reported. Comcast reported a third-quarter profit as it added a record 549,000 high-speed Internet access customers, Bloomberg reported. U.S. orders for durable goods rose in September for the third time in four months, driven by demand for military equipment and computers, Bloomberg reported. U.S. new home sales unexpectedly rose in September to the third highest total on record, bolstered by lower mortgage rates and suggesting housing is helping spurt the economy, Bloomberg said. Crude oil futures are falling after an Energy Dept. report showed that U.S. stockpiles rose more than expected, Bloomberg reported.

Bottom Line: The Portfolio is substantially higher mid-day, at its highs for the year, on strength in my wireless, internet and Chinese ADR longs. I have not traded today and the Portfolio is still 100% net long. I do believe the strong rally I forecasted for the fourth quarter has begun and that the lows for the year are in place. Technology is outperforming again today and should continue to strengthen into year-end. Many of these stocks are trading at very depressed levels after substantial declines in the 3rd quarter. Year-end budget flushes, capital equipment tax incentives, better-than-expected holiday sales and strengthening demand in China should also boost tech shares. Barring another significant decline in oil prices tomorrow, I expect U.S. stocks to trade mixed this afternoon and through tomorrow as apprehension increases ahead of the election. Another move higher will likely commence on Friday, spurred by a good GDP report and short-covering.