Morning Buy/Sell Recommendations

Goldman Sachs:
- Reiterated Outperform on DELL.
- Upgraded COF to Outperform.
- Upgraded FMD to Outperform.

Smith Barney:
- Said to Buy CELG, target $41.
- Reiterated Buy on FRE, target $80.

CSFB:
- Reiterated Outperform on CHK, DVN.
- Raised FO to Outperform, target $90.
- Raised ADS to Outperform, target $50.

Merrill Lynch:
- Lowered Retail sector to Underweight.
- Raised TKC to Buy.

Raymond James:
- Raised COGN to Strong Buy, target $56.50.
- Reiterated Strong Buy on RIG, target $61.50.
- Reiterated Strong Buy on ATW, target $93.
- Reiterated Strong Buy on JBL, target $39.

Banc of America:
- Upgraded FTI to Buy, target $39.
- Upgraded BHI to Buy, target $52.

UBS:
- Raised COGN to Buy, target $50.
- Raised KSU to Buy, target $26.
- Raised WCC to Buy, target $38.

Deutsche Bank:
- Raised ACN to Buy, target $28.
- Raised OXY to Buy, target $80.
- Rated APA Buy, target $71.
- Rated APC Buy, target $84.
- Rated BR Buy, target $54.
- Rated CHK Buy, target $26.
- Rated EOG Buy, target $53.
- Rated MUR Buy, target $110.
- Rated NFX Buy, target $83.
- Rated NBL Buy, target $82.
- Rated XTO Buy, target $37.
- Rated EAC Buy, target $69.
- Rated EPL Buy, target $29.
- Rated RRC Buy, target $28.

Bear Stearns:
- Raised MKTX to Outperform, target $14.

JP Morgan:
- Said Aluminum prices, now near a 10-year high, will fall in 2006 and stay lower for the rest of the decade as China boosts production.
- Rasied CYMI to Overweight.
- Cut VISG to Underweight.

Piper Jaffray:
- Rated GYI Outperform, target $78.
- Reiterated Buy on CY, target $18.

Friday Watch

Late-Night Headlines
Bloomberg:
- Confidence among Japan's large manufactures fell in March to its lowest in a year, the central bank's Tankan survey showed, reflecting concern a recovery in Asia's largest economy won't last.

Wall Street Journal:
- A US Defense Department panel approved full production of Lockheed Martin's F/A-22 stealth fighter airplane.
- Dell Inc. won't sell computers with the stripped-down version of Microsoft's Windows program.
- A Berkshire Hathaway Inc. insurance unit has undone a transaction handled by Ajit Jain, an associate of CEO Warren Buffett, after Jain and the unit were sued by a liquidator of the firm involved, citing people familiar with the situation.
- European telecom companies are investing some of their yearly generated $71.3 billion in cash to expand and strike deals.

CNN:
- Former US National Security Adviser during the Clinton administration, Sandy Berger, has agreed to plead guilty tomorrow in federal court for removing documents from the National Archive.

Financial Times:
- The European Union should forge ahead with plans to lift a 15-year-old arms embargo on China, citing German Chancellor Gerhard Schroeder.

Economic Times:
- India may allow overseas investors to own 100% of biotechnology companies in the country.

Shanghai Securities News:
- The time is right for China to adjust its exchange rate policy and a move may happen at any time.

Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on CAL.
- Reiterated Underperform on SMP and SLG.

Business Week:
- Acacia Research's(ACTG) Acacia Technology business may see revenue rise to $100 million a year if it prevails in patent-infringement lawsuits.
- The shares of wedding services Web site operator The Knot Inc.(KNOT) may rise on expectations of higher revenue and earnings because of more vendor advertisements and lower costs.
- Shares of MetLife Inc.(MET), the biggest US life insurer, are worth buying because the stock trades below others in the same industry group.

Night Trading
Asian Indices are -.25% to +.75% on average.
S&P 500 indicated +.03%.
NASDAQ 100 indicated +.17%.

Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Before the Bell CNBC Video(bottom right)
Asian Indices
European Indices
Top 20 Business Stories
In Play
Bond Ticker
Analyst Actions
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule

Earnings of Note
Company/EPS Estimate
BBY/1.55
DLP/.47
RDA/.04

Splits
COG 3-for-2
CBI 2-for-1
SM 2-for-1

Economic Releases
8:30 EST:
- The Unemployment Rate for March is estimated to fall to 5.3% versus 5.4% in February.
- Average Hourly Earnings for March are estimated to rise .2% versus 0.0% in February.
- The Change in Non-farm Payrolls for March is estimated to fall to 213K versus 262K in February.
- The Change in Manufacturing Payrolls for March is estimated to fall to 8K versus 20K in February.

9:45 EST:
- Final Univ. of Mich. Consumer Confidence for March is estimated to fall to 92.7 versus a prior estimate of 92.9.

10:00 EST:
- Construction Spending for February is estimated to rise .6% versus a .7% increase in January.
- ISM Manufacturing for March is estimated to fall to 55.0 versus a reading of 55.3 in February.
- ISM Prices Paid for March is estimated to rise to 66.0 versus a reading of 65.5 in February.

Afternoon:
- Total Vehicle Sales for March are estimated to rise to 16.7M versus 16.3M in February.
- Domestic Vehicle Sales for March are estimated to rise to 13.2M versus 13.0M in February.

BOTTOM LINE: Asian indices are higher, led by commodity-related shares in the region. I expect US equities to open mixed in the morning and rise later in the day on lower long-term interest rates. However, if the economic data is stronger than I expect, rates will rise which may send stocks lower. The Portfolio is 50% net long heading into tomorrow.

First Quarter Scoreboard*

Indices
S&P 500 1,180.59 -2.59%
DJIA 10,503.76 -2.59%
NASDAQ 1,999.23 -8.10%
Russell 2000 615.07 -5.60%
DJ Wilshire 5000 11,637.25 -2.63%
S&P Equity Long/Short Index 1,022.18 +.48%
S&P Barra Growth 569.05 -2.23%
S&P Barra Value 607.20 -2.93%
Morgan Stanley Consumer 577.86 -2.19%
Morgan Stanley Cyclical 746.99 -4.73%
Morgan Stanley Technology 455.43 -10.29%
Transports 3,715.97 -2.16%
Utilities 358.33 +6.98%
Put/Call .73 +17.74%
NYSE Arms 1.23 +2.50%
Volatility(VIX) 14.02 +5.49%
ISE Sentiment 129.00 -39.44%
AAII % Bulls 28.43 -50.69%
US Dollar 84.04 +3.96%
CRB 313.57 +10.45%

Futures Spot Prices
Crude Oil 55.28 +27.96%
Unleaded Gasoline 166.45 +35.32%
Natural Gas 7.65 +25.62%
Heating Oil 161.02 +40.14%
Gold 430.50 -2.91%
Base Metals 130.33 +3.72%
Copper 150.10 +6.27%
10-year US Treasury Yield 4.48% +6.23%
Average 30-year Mortgage Rate 6.04% +3.96%

Leading Sectors
Energy +18.12%
Hospitals +12.76%
Oil Service +12.40%

Lagging Sectors
Biotech -15.25%
Networking -18.26%
Airlines -18.48%

*1Q % Change

Thursday Close

Indices
S&P 500 1,180.59 -.07%
DJIA 10,503.76 -.35%
NASDAQ 1,999.23 -.32%
Russell 2000 615.07 +.03%
DJ Wilshire 5000 11,637.25 +.03%
S&P Barra Growth 569.05 -.32%
S&P Barra Value 607.20 +.18%
Morgan Stanley Consumer 577.86 -.30%
Morgan Stanley Cyclical 746.99 +.55%
Morgan Stanley Technology 455.43 -.61%
Transports 3,715.97 -.54%
Utilities 358.33 +1.09%
Put/Call .73 -12.05%
NYSE Arms 1.23 +116.32%
Volatility(VIX) 14.02 +2.79%
ISE Sentiment 129.00 -13.42%
US Dollar 84.05 unch.
CRB 313.57 +.82%

Futures Spot Prices
Crude Oil 55.20 -.36%
Unleaded Gasoline 166.15 -.10%
Natural Gas 7.64 -.17%
Heating Oil 161.38 -.14%
Gold 430.70 -.09%
Base Metals 130.33 +1.39%
Copper 150.25 unch.
10-year US Treasury Yield 4.48% -1.42%

Leading Sectors
Oil Service +3.11%
Disk Drives +2.11%
Energy +1.97%

Lagging Sectors
Insurance -1.24%
Airlines -1.61%
Restaurants -1.70%

After-hours Movers
PSRC +4.2% after missing 3Q estimates and raising 4Q outlook.
IPXL -4.4% after announcing that it was not able to file its Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2004.

Evening Review
Detailed Market Summary
Daily ETF Performance
Style Performance
Market Wrap CNBC Video(bottom right)
Futures Recap
S&P 500 Gallery View
Timely Economic Charts
PM Market Call
Real-time/After-hours Stock Quote
In Play

Afternoon Recommendations
Goldman Sachs:
- Reiterated Outperform on XRX.

Afternoon/Evening Headlines
Bloomberg:
- Paul Wolfowitz, the US Deputy Defense Secretary and an architect of the liberation of Iraq, was elected as the 10th president of the World Bank.
- Al-Qaeda had developed an “extensive, well-organized” biological weapons program before the wars in Afghanistan and Iraq and had the capacity to produce a “virulent” germ codenamed “Agent X,” a US presidential commission reported.
- Shares of MBIA Inc., the world’s biggest bond insurer, fell by the most in 2 ½ years after NY Attorney General Spitzer and the SEC sought new information about the company’s accounting practices.
- Illinois may require utilities to purchase 8% of their electricity from renewable resources such as wind and farm waste.
- American International Group faces higher financing costs and lower earnings after the company lost its top credit ratings because of flawed accounting.
- Google Inc. plans to boost spending on computers and equipment 57% to more than $500 million this year to develop new products and lure more visitors to its Web sites.

Fox News:
- Pope John Paul II has been given the last rites of the Roman Catholic Church because of his failing health.

Autralian:
- A Morgan Stanley real estate fund may buy Sidney’s Chifley Tower for about $541 million, making it Australia’s biggest office transaction.

BOTTOM LINE: US stocks fell modestly today after yesterday’s sharp gains and energy prices rose. The Portfolio finished lower on losses in my Base Metal shorts and Networking longs. I did not trade in the afternoon, thus leaving the Portfolio 50% net long. The tone of the market remained modestly negative into the afternoon as the advance/decline line fell slightly, sector performance stayed mixed and volume improved modestly. Energy-related stocks and Cyclicals outperformed throughout the day, while Tech underperformed and measures of investor anxiety were mostly higher. Overall, today’s market action was neutral. I expect long-term rates to decline further on tomorrow’s economic reports. Investors will likely respond favorably to this development as talk of a 50 basis point rate hike by the Fed fades into the background. I will post a 1Q Scoreboard later tonight.

Mid-day Scoreboard

Indices
S&P 500 1,180.88 -.04%
DJIA 10,506.05 -.33%
NASDAQ 1,998.14 -.38%
Russell 2000 613.77 -.18%
DJ Wilshire 5000 11,637.89 +.07%
S&P Barra Growth 569.83 -.18%
S&P Barra Value 607.60 +.24%
Morgan Stanley Consumer 578.18 -.24%
Morgan Stanley Cyclical 748.20 +.71%
Morgan Stanley Technology 456.29 -.44%
Transports 3,712.50 -.64%
Utilities 357.65 +.90%
Put/Call .79 -4.82%
NYSE Arms 1.12 +95.27%
Volatility(VIX) 13.90 +1.69%
ISE Sentiment 173.00 +16.11%
US Dollar 84.02 -.32%
CRB 315.50 +1.44%

Futures Spot Prices
Crude Oil 55.60 +3.07%
Unleaded Gasoline 164.80 +3.25%
Natural Gas 7.69 +3.08%
Heating Oil 166.80 +3.82%
Gold 430.80 +.30%
Base Metals 130.33 +1.39%
Copper 150.10 +.60%
10-year US Treasury Yield 4.50% -.98%

Leading Sectors
Oil Service +2.76%
Energy +1.75%
Commodity +1.60%

Lagging Sectors
Networking -1.02%
Restaurants -1.43%
Airlines -1.77%

Links of Interest
Market Internals
Movers & Shakers
I-Watch Sector Overview
NYSE Unusual Volume
NASDAQ Unusual Volume
NASDAQ 100 Heatmap
DJIA Quick Charts
Chart Toppers
Hot Spots
Option Dragon
Real-time Intraday Chart/Quote

BOTTOM LINE: US stocks are modestly lower mid-day on worries over higher energy prices. The Portfolio is slightly lower as losses in my Base Metal shorts and Networking longs are more than offsetting gains in my Homebuilding and Software longs. I exited some Tech longs this morning as they hit stop-losses, thus bringing the Portfolio’s market exposure to 50% net long. The tone of the market is modestly negative as the advance/decline line is lower, sector performance is mixed and volume is light. Technology stocks are underperforming, while Cyclical stocks are outperforming and measures of investor anxiety are mixed. Today’s overall market action is neutral. It is a positive that stocks are maintaining yesterday’s gains for the most part even with Goldman Sachs’, the largest trader of energy derivatives, outrageous $105/bbl. spike oil call on the last day of the quarter. However, with long-term interest rates declining, I would have expected stocks to rise notwithstanding that call. I expect US stocks to trade mixed-to-higher into the close as short-covering, bargain hunting, quarter-end window-dressing and lower long-term interest rates more than offsets worries over higher energy prices.

Today's Headlines

Bloomberg:
- India’s economy grew at the slowest pace in six-quarters as below-average rainfall reduced harvests.
- French joblessness rose in February, keeping the unemployment rate at a five-year high of 10.1% which is almost double the US unemployment rate.
- The unemployment rate in Germany rose to 12.0% in March, another post WWII record, as companies eliminated jobs in response to slowing demand.
- Continental Airlines will reduce annual expenses by $418 million after the company’s pilots, dispatchers and mechanics accepted new pay and benefit agreements.
- Shares of Zimmer Holdings, Stryker and other makers of artificial hips and knees fell after federal prosecutors demanded documents related to some of the companies’ contracts with surgeons.
- Ted Koppel, anchor and managing editor of Disney’s ABC news show “Nightline,” is leaving the program when his contract expires in December.
- US Treasury notes rose after first-time claims for unemployment insurance benefits unexpectedly increased and the Fed’s most watched measure of inflation held steady.
- Crude oil is rising and gasoline and heating-oil surged to records on signs that US refineries lack capacity to make enough fuel and Goldman Sachs predicted that oil could touch $105/bbl.

The Wall Street Journal:
- Some investors are speculating that Morgan Stanley may end up selling the whole company or part of it, as it copes with a rift between CEO Purcell and former executives.
- Web sites such as those run by American Eagle Publications of Show Low, Arizona, are selling or giving away software coding for computer viruses.

Reuters:
- Intel and Bertelsmann AG will work together to develop Internet technology to download and share films, music and other files.

New York Times:
- Qwest Communications may announce a higher offer for MCI Inc. as early as today to prevent an acquisition by Verizon Communiciations.
- The threat of terrorism promoted and financed by foreign countries against the US is falling.

NY Post:
- Haggar Corp. has hired Bear Stearns to help it explore alternatives, including a possible sale.

Boston Globe:
- The Massachusetts Senate passed a bill yesterday supporting embryonic stem cell research, a setback to Governor Mitt Romney because it promotes a technique that involves cloning human cells.

Washington Post:
- Washington, DC-area officials are considering laws to reduce how much land a house and driveway can cover on a piece of property, in an effort to curb construction on over-sized residences.

Women’s Wear Daily:
- JC Penney is the target of a leveraged buyout by a group led by Cerberus Capital Management LP and the Carlyle Group.

Al-Ahram:
- Apache Corp. secured new rights to explore for oil and gas in Egypt for about $50 million.

Dagens Industri:
- Ericsson AB expects the number of mobile phone users in the Middle East to rise by as many as 36 million over the next three years.