STEP Commentary Changes to the Dividend STEP March 22, 2010 $PNC $ACN HON

• Adding a 2.5% position in ACN. We agree with Adam Frisch's non-consensus, positive view heading into 2Q results on Thursday.
  
• Increasing the portfolio's position in Honeywell to 5% from 2.5%. Despite HON's recent outperformance
  (up 15% YTD), we continue to see strong valuation support with a roughly 8% free cash flow yield
  
• Removing the portfolio's 5% position in PNC Financial Services $PNC 
  
  
  The Step team at morgan Stanley has increased weighting increases the portfolio's overweight in industrials to 17.5% vs. 10.5% for the S&P.

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