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The major indexes continue to hover near the unchanged level as we pass the mid-point of today's session with the Dow Industrials (INDU) 8,321 +0.24% attempting to challenge this morning's high of 8,331 and currently showing a 21-point gain as component Altria (NYSE:MO) $30.62 +5.5% leads today's components gains after and Illinois judge temporarily block a $3 billion punitive- damage award that another judge had ordered the company's tobacco unit to pay the state.

Cook County Circuit Judge James Henry said that Illinois had released any claims to money from tobacco companies when it agreed to a multi-state settlement in 1998. The $3 billion was awarded as part of a staggering $12 billion verdict entered against Philip Moris USA on March 21, 2003.

In that class-action suite, Madison County Circuit Judge Nicholas Byron found that Philip Morris had defrauded million of consumers by claiming that "light" cigarettes were somehow less harmful than their regular cigarettes. Of the $12 billion punitive damages, $7 billion of the total was slated to go to the plaintiffs, $3 billion to Illinois and the rest to attorneys.

At the Time, Judge Byron's ruling ordered MO to pay up a $12 billion bond if it wished to appeal, which was a sum the company has said would hurt its ability to pay out its share of the 1998 agreement. Judge Byron was expected to rule on the company's appeal of that bond later today, but today's temporary block gives rise to speculation that a "favorable" deal between MO and the state of Illinois may be in the making.

Sector action remains broadly negative, with the Biotetechnology Index (BTK.X) 340.87 +0.82% and KBW Bank Index (BKX.X) 748 +0.75% the only two sectors really showing any signs of bucking a more negative trade in today's session. The Semiconductor Index (SOX.X) 305 -2.95% has slipped back under a trending lower 200- day SMA and leads today's sector weakness after RF Micro Devices (NASDAQ:RFMD) $5.48 -9.4%, which designs and develops integrated circuits said it would fall short of analysts expectations in its first quarter, which ended in March.

Despite weakness among semiconductors today, the NASDAQ-100 Index (NDX.X) 1,050 -0.33% sees a fractional 3.5-point decline as software bellwether Microsoft (NASDAQ:MSFT) $25.64 +1.82% attempts to shrug off last week's earnings warning from PeopleSoft (NASDAQ:PSFT) $15.32 +2.13%. Microsoft (MSFT) is today's most actively traded stock in today's session at just over 34 million shares (avg. daily volume is 61.4 million), and after a two-session close below a trying to round-out 200-day SMA of $25.35, sees some near-term bullish signs with a move back above this longer-term and closely monitored moving average.

Treasuries remain just off their highs of the session with the 10-year June futures contract (ty03m) $114'050 +0.41% gaining 15/32 as the benchmark bond's YIELD ($TNX.X) falls to 3.948%.

Internal breadth at this hour has the NYSE showing negative breadth at 17:14, while NASDAQ breadth is equally weak at 15:13. The NYSE is reporting 25 stocks having traded a new 52-week high compared to 12 stocks trading a new 52-week low, while NASDAQ reports 46 stocks having traded a new 52-week high compared to 28 stocks at new 52-week lows.

Notable new 52-week highs as Equity One (NYSE:EQY) $15.54 +0.58%, which is a real estate investment trust (REIT) and Wynn Resorts (NASDAQ:WYNN) $15.91 +0.25%, which is constructing and will own Le Reve, a luxury hotel destination casino in Las Vegas, NV, trading new 52-week highs.

Notable 52-week lows has Accredo Health (NYSE:ACDO) $14.59 -42% getting hammered after lowering fiscal year 2003 guidance and saying it is currently examining adequacy of account reserves. Also trading a 52-week low in Japan-based Sony Corp. (NYSE:SNE) $34.16 -2.09%.

Jeff Bailey

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