Federated Stock and Bond Fund, Inc.

N-CSRS 1 form.htm Federated Stock and Bond Fund, Inc. - N-CSRs

                                  United States
                       Securities and Exchange Commission
                             Washington, D.C. 20549

                                   Form N-CSR
                         Certified Shareholder Report of
               Registered Management Investment Companies




                                      811-1

                      (Investment Company Act File Number)


                       Federated Stock and Bond Fund, Inc.
    ---------------------------------------------------------------

           (Exact Name of Registrant as Specified in Charter)



                            Federated Investors Funds
                              5800 Corporate Drive
                       Pittsburgh, Pennsylvania 15237-7000


                                 (412) 288-1900
                         (Registrant's Telephone Number)


                           John W. McGonigle, Esquire
                            Federated Investors Tower
                               1001 Liberty Avenue
                       Pittsburgh, Pennsylvania 15222-3779
                     (Name and Address of Agent for Service)
                (Notices should be sent to the Agent for Service)






                        Date of Fiscal Year End: 11/30/06


               Date of Reporting Period: Six months ended 5/31/06
                            ------------------------








Item 1.     Reports to Stockholders

Federated
World-Class Investment Manager

Federated Stock and Bond Fund, Inc.

Established 1934

SEMI-ANNUAL SHAREHOLDER REPORT

May 31, 2006

Class A Shares
Class B Shares
Class C Shares
Class K Shares

FINANCIAL HIGHLIGHTS
SHAREHOLDER EXPENSE EXAMPLE
PORTFOLIO OF INVESTMENTS SUMMARY TABLES
PORTFOLIO OF INVESTMENTS
STATEMENT OF ASSETS AND LIABILITIES
STATEMENT OF OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
NOTES TO FINANCIAL STATEMENTS
EVALUATION AND APPROVAL OF ADVISORY CONTRACT
VOTING PROXIES ON FUND PORTFOLIO SECURITIES
QUARTERLY PORTFOLIO SCHEDULE

Not FDIC Insured * May Lose Value * No Bank Guarantee

Financial Highlights - Class A Shares

(For a Share Outstanding Throughout Each Period)

	Six Months Ended (unaudited)
	5/31/2006
Net Asset Value, Beginning of Period	$18.95
Income From Investment Operations:
Net investment income	0.20
Net realized and unrealized gain (loss) on investments, foreign currency transactions, and futures contracts	0.23
TOTAL FROM INVESTMENT OPERATIONS	0.43
Less Distributions:
Distributions from net investment income	(0.18	)
Distributions from net realized gain on investments, foreign currency transactions and futures contracts	(0.33	)
TOTAL DISTRIBUTIONS	(0.51	)
Net Asset Value, End of Period	$18.87
Total Return²	2.28	%³

Ratios to Average Net Assets:
Net expenses	1.13	%^6,7
Net investment income	1.97	%⁶
Expense waiver/reimbursement⁸	0.13	%⁶
Supplemental Data:
Net assets, end of period (000 omitted)	$217,243
Portfolio turnover	56	%

1 The Fund changed its fiscal year end from October 31 to November 30. This period represents the one-month period from November 1, 2003 to November 30, 2003.

2 Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. Total returns for periods of less than one year, if any, are not annualized.

3 During the period, the Fund was reimbursed by the Shareholder Services Provider, which had an impact of 0.01% on the total return. See Notes to Financial Statements (Note 5).

4 During the period, the Fund was reimbursed by the Adviser, which had an impact of less than 0.01% on the total return. See Notes to Financial Statements (Note 5).

5 During the period, the Fund was reimbursed by the Shareholder Services Provider, which had an impact of 0.02% on the total return. See Notes to Financial Statements (Note 5).

6 Computed on an annualized basis.

7 The net expense ratio is calculated without reduction for fees paid indirectly for directed brokerage arrangements. The impact to the net expense ratios was less than 0.01% for the six months ended May 31, 2006, the years ended November 30, 2005 and November 30, 2004, the period ended November 30, 2003, and the years ended October 31, 2003 and October 31, 2002, respectively, after taking into account these expense reductions.

8 This expense decrease is reflected in both the net expense and the net investment income ratios shown above.

9 Represents less than 0.01%.

See Notes which are an integral part of the Financial Statements

Year Ended November 30,				Period Ended		Year Ended October 31,
2005		2004		11/30/2003	¹	2003		2002		2001
$18.38		$17.38		$17.32		$15.61		$17.22		$18.78

0.31		0.36		0.02		0.31		0.39		0.48
0.56		1.01		0.11		1.71		(1.62	)	(1.04	)
0.87		1.37		0.13		2.02		(1.23	)	(0.56	)

(0.30	)	(0.37	)	(0.07	)	(0.31	)	(0.38	)	(0.53	)
--		--		--		--		--		(0.47	)
(0.30	)	(0.37	)	(0.07	)	(0.31	)	(0.38	)	(1.00	)
$18.95		$18.38		$17.38		$17.32		$15.61		$17.22
4.75	%^4,5	7.89	%	0.75	%	13.08	%	(7.32	)%	(3.12	)%


1.16	%⁷	1.29	%⁷	1.26	%^6,7	1.31	%⁷	1.26	%⁷	1.31	%
1.63	%	1.72	%	1.64	%⁶	1.89	%	2.32	%	2.64	%
0.08	%	0.01	%	0.01	%⁶	0.00	%⁹	0.00	%⁹	0.00	%⁹

$234,204		$237,428		$226,701		$224,461		$184,294		$175,854
50	%	47	%	1	%	74	%	54	%	28	%

Financial Highlights - Class B Shares

(For a Share Outstanding Throughout Each Period)

	Six Months Ended (unaudited)
	5/31/2006
Net Asset Value, Beginning of Period	$18.93
Income From Investment Operations:
Net investment income	0.11
Net realized and unrealized gain (loss) on investments, foreign currency transactions, and futures contracts	0.23
TOTAL FROM INVESTMENT OPERATIONS	0.34
Less Distributions:
Distributions from net investment income	(0.10	)
Distributions from net realized gain on investments, foreign currency transactions and futures contracts	(0.33	)
TOTAL DISTRIBUTIONS	(0.43	)
Net Asset Value, End of Period	$18.84
Total Return²	1.82	%

Ratios to Average Net Assets:
Net expenses	1.95	%^4,5
Net investment income	1.14	%⁴
Expense waiver/reimbursement⁶	0.12	%⁴
Supplemental Data:
Net assets, end of period (000 omitted)	$55,014
Portfolio turnover	56	%

1 The Fund changed its fiscal year end from October 31 to November 30. This period represents the one-month period from November 1, 2003 to November 30, 2003.

3 During the period, the Fund was reimbursed by the Adviser, which had an impact of less than 0.01% on the total return. See Notes to Financial Statements (Note 5).

4 Computed on an annualized basis.

5 The net expense ratio is calculated without reduction for fees paid indirectly for directed brokerage arrangements. The impact to the net expense ratios was less than 0.01% for the six months ended May 31, 2006, the years ended November 30, 2005 and November 30, 2004, the period ended November 30, 2003, and the years ended October 31, 2003 and October 31, 2002, respectively, after taking into account these expense reductions.

6 This expense decrease is reflected in both the net expense and the net investment income ratios shown above.

7 Represents less than 0.01%.

See Notes which are an integral part of the Financial Statements

Year Ended November 30,				Period Ended		Year Ended October 31,
2005		2004		11/30/2003	¹	2003		2002		2001
$18.36		$17.36		$17.28		$15.58		$17.19		$18.75

0.14		0.23		0.01		0.19		0.26		0.35
0.58		1.00		0.11		1.70		(1.62	)	(1.05	)
0.72		1.23		0.12		1.89		(1.36	)	(0.70	)

(0.15	)	(0.23	)	(0.04	)	(0.19	)	(0.25	)	(0.39	)
--		--		--		--		--		(0.47	)
(0.15	)	(0.23	)	(0.04	)	(0.19	)	(0.25	)	(0.86	)
$18.93		$18.36		$17.36		$17.28		$15.58		$17.19
3.95	%³	7.08	%	0.68	%	12.22	%	(8.02	)%	(3.85	)%


1.95	%⁵	2.04	%⁵	2.01	%^4,5	2.06	%⁵	2.01	%⁵	2.06	%
0.84	%	0.97	%	0.89	%⁴	1.14	%	1.57	%	1.89	%
0.06	%	0.01	%	0.01	%⁴	0.00	%⁷	0.00	%⁷	0.00	%⁷

$63,151		$73,911		$72,412		$71,836		$59,165		$60,058
50	%	47	%	1	%	74	%	54	%	28	%

Financial Highlights - Class C Shares

(For a Share Outstanding Throughout Each Period)

	Six Months Ended (unaudited)
	5/31/2006
Net Asset Value, Beginning of Period	$18.88
Income From Investment Operations:
Net investment income	0.11
Net realized and unrealized gain (loss) on investments, foreign currency transactions, and futures contracts	0.23
TOTAL FROM INVESTMENT OPERATIONS	0.34
Less Distributions:
Distributions from net investment income	(0.10	)
Distributions from net realized gain on investments, foreign currency transactions and futures contracts	(0.33	)
TOTAL DISTRIBUTIONS	(0.43	)
Net Asset Value, End of Period	$18.79
Total Return²	1.85	%

Ratios to Average Net Assets:
Net expenses	1.91	%^4,5
Net investment income	1.18	%⁴
Expense waiver/reimbursement⁶	0.12	%⁴
Supplemental Data:
Net assets, end of period (000 omitted)	$27,028
Portfolio turnover	56	%

1 The Fund changed its fiscal year end from October 31 to November 30. This period represents the one-month period from November 1, 2003 to November 30, 2003.

3 During the period, the Fund was reimbursed by the Adviser, which had an impact of less than 0.01% on the total return. See Notes to Financial Statements (Note 5).

4 Computed on an annualized basis.

6 This expense decrease is reflected in both the net expense and the net investment income ratios shown above.

7 Represents less than 0.01%.

See Notes which are an integral part of the Financial Statements

Year Ended November 30,				Period Ended		Year Ended October 31,
2005		2004		11/30/2003	¹	2003		2002		2001
$18.31		$17.32		$17.24		$15.54		$17.15		$18.70

0.17		0.23		0.01		0.19		0.26		0.35
0.56		1.00		0.11		1.70		(1.62	)	(1.04	)
0.73		1.23		0.12		1.89		(1.36	)	(0.69	)

(0.16	)	(0.24	)	(0.04	)	(0.19	)	(0.25	)	(0.39	)
--		--		--		--		--		(0.47	)
(0.16	)	(0.24	)	(0.04	)	(0.19	)	(0.25	)	(0.86	)
$18.88		$18.31		$17.32		$17.24		$15.54		$17.15
3.98	%³	7.09	%	0.68	%	12.25	%	(8.03	)%	(3.81	)%


1.93	%⁵	2.02	%⁵	2.01	%^4,5	2.04	%⁵	2.01	%⁵	2.06	%
0.88	%	0.99	%	0.89	%⁴	1.16	%	1.57	%	1.89	%
0.06	%	0.01	%	0.01	%⁴	0.00	%⁷	0.00	%⁷	0.00	%⁷

$28,922		$26,704		$27,853		$27,731		$22,567		$24,032
50	%	47	%	1	%	74	%	54	%	28	%

Financial Highlights-Class K Shares

(For a Share Outstanding Throughout Each Period)

	Six Months Ended (unaudited)
	5/31/2006
Net Asset Value, Beginning of Period	$18.98
Income From Investment Operations:
Net investment income	0.15
Net realized and unrealized gain on investments, foreign currency transactions and futures contracts	0.22
TOTAL FROM INVESTMENT OPERATIONS	0.37
Less Distributions:
Distributions from net investment income	(0.13	)
Distributions from net realized gain on investments, foreign currency transactions and futures contracts	(0.33	)
TOTAL DISTRIBUTIONS	(0.46	)
Net Asset Value, End of Period	$18.89
Total Return³	1.97	%

Ratios to Average Net Assets:
Net expenses	1.63	%^5,6
Net investment income	1.50	%⁵
Expense waiver/reimbursement⁷	0.12	%⁵
Supplemental Data:
Net assets, end of period (000 omitted)	$5,725
Portfolio turnover	56	%

1 The Fund changed its fiscal year end from October 31 to November 30. This period represents the one-month period from November 1, 2003 to November 30, 2003.

2 Reflects operations for the period from April 8, 2003 (start of performance) to October 31, 2003.

3 Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. Total returns for periods of less than one year, if any, are not annualized.

4 During the period, the Fund was reimbursed by the Adviser, which had an impact of less than 0.01% on the total return. See Notes to Financial Statements (Note 5).

5 Computed on an annualized basis.

6 The net expense ratio is calculated without the reduction for fees paid indirectly for directed brokerage arrangements. The impact to the net expense ratios was less than 0.01% for the six months ended May 31, 2006, the years ended November 30, 2005 and November 30, 2004, and the periods ended November 30, 2003 and October 31, 2003, respectively, after taking into account these expense reductions.

7 This expense decrease is reflected in both the net expense and the net investment income ratios shown above.

8 Represents less than 0.01%.

9 Represents less than $1,000.

See Notes which are an integral part of the Financial Statements

Year Ended November 30,				Period Ended
2005		2004		11/30/2003	¹	10/31/2003	²
$18.40		$17.38		$17.32		$15.61

0.25		0.29		0.01		0.10
0.53		1.03		0.10		1.71
0.78		1.32		0.11		1.81

(0.20	)	(0.30	)	(0.05	)	(0.10	)
--		--		--		--
(0.20	)	(0.30	)	(0.05	)	(0.10	)
$18.98		$18.40		$17.38		$17.32
4.27	%⁴	7.64	%	0.64	%	11.64	%


1.65	%⁶	1.74	%⁶	1.78	%^,5,6	1.81	%^5,6
1.31	%	2.52	%	1.14	%⁵	1.39	%⁵
0.05	%	0.01	%	0.01	%⁵	0.00	%^5,8

$1,048		$65		$0	⁹	$0	⁹
50	%	47	%	1	%	74	%

Shareholder Expense Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase or redemption payments; and (2) ongoing costs, including management fees; to the extent applicable, distribution (12b-1) fees and/or shareholder services fees; and other Fund expenses. This Example is intended to help you to understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. It is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from December 1, 2005 to May 31, 2006.

ACTUAL EXPENSES

The first section of the table below provides information about actual account values and actual expenses. You may use the information in this section, together with the amount you invested, to estimate the expenses that you incurred over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first section under the heading entitled "Expenses Paid During Period" to estimate the expenses attributable to your investment during this period.

HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES

The second section of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. Thus, you should not use the hypothetical account values and expenses to estimate the actual ending account balance or your expenses for the period. Rather, these figures are provided to enable you to compare the ongoing costs of investing in the Fund with other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase or redemption payments. Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.

	Beginning Account Value 12/1/2005	Ending Account Value 5/31/2006	Expenses Paid During Period¹
Actual:
Class A Shares	$1,000	$1,022.80	$5.70
Class B Shares	$1,000	$1,018.20	$9.81
Class C Shares	$1,000	$1,018.50	$9.61
Class K Shares	$1,000	$1,019.70	$8.21
Hypothetical (assuming a 5% return before expenses):
Class A Shares	$1,000	$1,019.30	$5.69
Class B Shares	$1,000	$1,015.21	$9.80
Class C Shares	$1,000	$1,015.41	$9.60
Class K Shares	$1,000	$1,016.80	$8.20

1 Expenses are equal to the Fund's annualized net expense ratios, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period).The annualized net expense ratios are as follows:

Class A Shares		1.13%
Class B Shares		1.95%
Class C Shares		1.91%
Class K Shares		1.63%

Portfolio of Investments Summary Tables

At May 31, 2006, the Fund's portfolio composition¹ was as follows:

Sector	Percentage of Total Net Assets
Domestic Equity	54.5	%
U.S. Treasury and Agency Securities²	12.6	%
Corporate Debt Securities	11.0	%
International Equity	9.2	%
Mortgage-Backed Securities	8.9	%
Foreign Debt Securities	0.3	%
Asset-Backed Securities	0.1	%
Cash Equivalents³	7.9	%
Other Assets and Liabilities--Net⁴	(4.5	)%
TOTAL	100.0	%

At May 31, 2006, the Fund's sector composition⁵ for its equity securities was as follows:

Sector Composition		Percentage of Equity Securities
Health Care		18.0%
Financials		15.9%
Information Technology		13.4%
Energy		12.4%
Industrials		11.5%
Consumer Staples		9.1%
Consumer Discretionary		6.5%
Telecommunication Services		5.3%
Materials		4.4%
Utilities		3.5%
TOTAL		100.0%

1 See the Fund's Prospectus for a description of the principal types of securities in which the Fund invests. As of the date specified above, the Fund owned shares of one or more affiliated investment companies. For purposes of these tables, the affiliated investment company (other than an affiliated money market fund) is not treated as a single portfolio security, but rather the Fund is treated as owning a pro rata portion of each security and each other asset and liability owned by the affiliated investment company. Accordingly, the percentages of total net assets shown in the table will differ from those presented on the Portfolio of Investments.

2 Also includes $16.17 million held in U.S. Treasuries pledged as collateral to ensure the Fund is able to satisfy the obligations of its outstanding S&P 500 June 2006 futures contracts.

3 Cash Equivalents include any investments in money market mutual funds and/or overnight repurchase agreements.

4 Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities.

5 Sector classifications are based upon, and individual portfolio securities are assigned to, the classifications of the Global Industry Classification Standard (GICS) except that the adviser assigns a classification to securities not classified by the GICS and to securities for which the adviser does not have access to the classification made by the GICS.

Portfolio of Investments

May 31, 2006 (unaudited)

Shares					Value
			STOCKS--54.5%
			COMMON STOCKS--54.5%
			Consumer Discretionary--3.5%
	80,750		McDonald's Corp.	$	2,678,477
	39,200		Nike, Inc., Class B		3,148,152
	51,500		Target Corp.		2,519,380
	36,800		Wendy's International, Inc.		2,218,304
			TOTAL		10,564,313
			Consumer Staples--5.0%
	60,800		Altria Group, Inc.		4,398,880
	73,900		Diageo PLC, ADR		4,891,441
	50,200		General Mills, Inc.		2,604,878
	51,200		PepsiCo, Inc.		3,095,552
	12,000	¹	Smithfield Foods, Inc.		333,720
			TOTAL		15,324,471
			Energy--6.9%
	43,600		Apache Corp.		2,828,768
	99,500		Exxon Mobil Corp.		6,060,545
	41,700		GlobalSantaFe Corp.		2,507,421
	11	¹	NRG Energy, Inc.		547
	34,600	¹	Transocean Sedco Forex, Inc.		2,815,402
	61,900	¹	Weatherford International, Inc.		3,221,276
	84,800		XTO Energy, Inc.		3,495,456
			TOTAL		20,929,415
			Financials--7.5%
	67,500		Ace, Ltd.		3,494,475
	74,400		Allstate Corp.		4,092,744
	95,100		American International Group, Inc.		5,782,080
	1,000	¹	Arcadia Financial Ltd. - Warrants		0
	88,100		Citigroup, Inc.		4,343,330
	35,700		Merrill Lynch & Co., Inc.		2,585,037
	42,900		Morgan Stanley		2,557,698
			TOTAL		22,855,364
Shares					Value
			STOCKS--continued
			COMMON STOCKS--continued
			Health Care--10.5%
	54,400	¹	Amgen, Inc.	$	3,676,896
	67,200		AstraZeneca Group PLC, ADR		3,557,568
	92,700	¹	Forest Laboratories, Inc., Class A		3,474,396
	15,700	¹	Gilead Sciences, Inc.		900,081
	40,225		Johnson & Johnson		2,422,349
	34,700		McKesson HBOC, Inc.		1,717,650
	57,100	¹	Medimmune, Inc.		1,816,922
	66,100		Novartis AG, ADR		3,667,228
	57,700		Pfizer, Inc.		1,365,182
	74,800		Shire PLC, ADR		3,305,412
	47,500	¹	St. Jude Medical, Inc.		1,619,750
	97,200		Wyeth		4,445,928
			TOTAL		31,969,362
			Industrials--6.4%
	52,700		Avery Dennison Corp.		3,129,853
	31,700		Deere & Co.		2,713,520
	90,900	¹	Foster Wheeler Ltd.		4,022,325
	66,000		Northrop Grumman Corp.		4,268,880
	88,100		United Technologies Corp.		5,508,012
			TOTAL		19,642,590
			Information Technology--7.9%
	155,100		Applied Materials, Inc.		2,622,741
	129,000	¹	Cadence Design Systems, Inc.		2,327,160
	92,000	¹	Cisco Systems, Inc.		1,810,560
	336,500	¹	EMC Corp. Mass		4,307,200
	35,800		International Business Machines Corp.		2,860,420
	30,400		Linear Technology Corp.		1,026,000
	136,300		Microsoft Corp.		3,087,195
	126,700	¹	Oracle Corp.		1,801,674
	36,500		SAP AG, ADR		1,920,995
	181,400	¹	Xerox Corp.		2,490,622
			TOTAL		24,254,567
Shares or Principal Amount					Value
			STOCKS--continued
			COMMON STOCKS--continued
			Materials--1.7%
	33,500		Alcan Aluminum Ltd.	$	1,753,725
	103,900		Alcoa, Inc.		3,295,708
			TOTAL		5,049,433
			Telecommunication Services--2.9%
	179,900		AT&T, Inc.		4,688,194
	119,900		BellSouth Corp.		4,049,023
			TOTAL		8,737,217
			Utilities--2.2%
	55,200		Consolidated Edison Co.		2,434,320
	49,200		FirstEnergy Corp.		2,579,064
	30,200		TXU Corp.		1,730,460
			TOTAL		6,743,844
			TOTAL COMMON STOCKS (IDENTIFIED COST $148,205,187)		166,070,576
			ASSET-BACKED SECURITIES--0.1%
$	112,449	²	125 Home Loan Owner Trust 1998-1A B1, 9.26%, 02/15/2029		112,449
	184,030		Chase Funding Mortgage Loan Asset-Backed Certificates 2003-6 1A3, 3.34%, 5/25/2026		179,685
	21,884		Residential Asset Mortgage Pro 2003RS11 AIIB, 12/25/2033		21,891
			TOTAL ASSET-BACKED SECURITIES (IDENTIFIED COST $316,965)		314,025
			COLLATERALIZED MORTGAGE OBLIGATIONS--1.1%
	550,000		CS First Boston Mortgage Securities Corp. 2005-C6 A2FX, 5.207%, 12/15/2040		540,597
	7,460		Federal Home Loan Mortgage Corp. REMIC 1610 PM, 6.250%, 4/15/2022		7,469
	708,176		Federal National Mortgage Association REMIC 2002-52 FG, 5.581%, 9/25/2032		713,606
	619,824		Morgan Stanley Capital, Inc. 2004-T13 A1, 2.85%, 9/13/2045		592,779
	11,878	²	SMFC Trust Asset-Backed Certificates, 1997-A B1-4, 1/28/2027		9,384
	222,912		Washington Mutual, Inc., 2003-AR4 A6, 3.423%, 5/25/2033		216,695
	1,000,000		Washington Mutual, Inc., 2003-AR5, A6, 3.695%, 6/25/2033		970,374
	354,309		Wells Fargo Mortgage Backed Securities Series 2003-18, Class A1, 5.5%, 12/25/2033		338,409
			TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (IDENTIFIED COST $3,470,458)		3,389,313
Principal Amount					Value
			CORPORATE BONDS--8.4%
			Basic Industry - Metals & Mining--0.1%
$	80,000		Alcan, Inc., 5%, 6/1/2015	$	74,629
	110,000		BHP Finance (USA), Inc., 5%, 12/15/2010		107,597
	120,000		Newmont Mining Corp., 5.875%, 4/1/2035		107,165
	100,000		Thiokol Corp., Sr. Note, 6.625%, 3/1/2008		101,733
			TOTAL		391,124
			Basic Industry - Paper--0.2%
	70,000		International Paper Co., 5.5%, 1/15/2014		66,536
	200,000		Louisiana-Pacific Corp., 8.875%, 8/15/2010		223,706
	150,000		Pope & Talbot, Inc., 8.375%, 6/1/2013		127,500
	100,000		Weyerhaeuser Co., Deb., 7.375%, 3/15/2032		101,773
			TOTAL		519,515
			Capital Goods - Aerospace & Defense--0.2%
	110,000	²	BAE Systems Holdings, Inc., 5.2%, 8/15/2015		102,176
	400,000		Raytheon Co., Unsecd. Note, 5.375%, 4/1/2013		390,276
			TOTAL		492,452
			Capital Goods - Building Materials--0.0%
	50,000		Masco Corp., 4.8%, 6/15/2015		45,006
			Capital Goods - Diversified Manufacturing--0.4%
	70,000		Eaton Corp., 8.9%, 8/15/2006		70,473
	100,000		Emerson Electric Co., Note, 5%, 10/15/2008		98,954
	250,000		General Electric Co., Note, 5%, 2/1/2013		241,211
	140,000	²	Hutchison Whampoa Ltd., 6.5%, 2/13/2013		143,098
	250,000		Kennametal, Inc., 7.2%, 6/15/2012		261,922
	250,000	²	Tyco International Group, 4.436%, 6/15/2007		247,183
	80,000		Tyco International Group, Company Guarantee, 6.375%, 10/15/2011		82,045
			TOTAL		1,144,886
			Communications - Media & Cable--0.1%
	75,000		AT&T Broadband, Company Guarantee, 8.375%, 3/15/2013		83,853
	100,000		Comcast Corp., 7.05%, 3/15/2033		100,455
	110,000		Cox Communications, Inc., Unsecd. Note, 4.625%, 1/15/2010		105,199
			TOTAL		289,507
Principal Amount					Value
			CORPORATE BONDS--continued
			Communications - Media Noncable--0.2%
$	250,000		British Sky Broadcasting Group PLC, Note, 6.875%, 2/23/2009	$	257,397
	250,000		Clear Channel Communications, 3.125%, 2/1/2007		245,681
	100,000		Reed Elsevier, Inc., 4.625%, 6/15/2012		93,102
			TOTAL		596,180
			Communications - Telecom Internet--0.0%
	50,000		Insight Midwest LP, Sr. Note, 9.75%, 10/1/2009		51,375
			Communications - Telecom Wireless--0.2%
	75,000		AT&T Wireless Services, Inc., Sr. Note, 7.875%, 3/1/2011		81,474
	90,000		America Movil S.A. de C.V, Note, 5.75%, 1/15/2015		84,762
	500,000		Sprint Capital Corp., Company Guarantee, 6.125%, 11/15/2008		505,823
	75,000		Sprint Capital Corp., Note, 8.375%, 3/15/2012		83,720
			TOTAL		755,779
			Communications - Telecom Wirelines--0.1%
	100,000		Deutsche Telekom International, 5.25%, 7/22/2013		94,713
	60,000		Embarq Corp., 6.738%, 6/1/2013		60,158
	100,000		GTE Corp, 7.51%, 4/1/2009		104,485
	200,000		Telefonos de Mexico, Note, 4.5%, 11/19/2008		193,880
			TOTAL		453,236
			Consumer Cyclical - Automotive--0.5%
	350,000		DaimlerChrysler North America Holding Corp., Unsecd. Note, 4.05%, 6/4/2008		339,286
	285,000		DaimlerChrysler North America Holding Corp., 6.5%, 11/15/2013		286,846
	250,000		Ford Motor Credit Co., Note, 6.5%, 1/25/2007		249,896
	250,000		Ford Motor Credit Co., Note, 7.375%, 10/28/2009		230,439
	60,000		Ford Motor Credit Co., Unsecd. Note, 7.375%, 2/1/2011		53,934
	25,000		General Motors Acceptance, Note, 5.125%, 5/9/2008		23,690
	110,000		General Motors Acceptance, 8%, 11/1/2031		103,591
	130,000	²	Nissan Motor Acceptance, Sr. Unsecd. Note, 5.625%, 3/14/2011		128,450
			TOTAL		1,416,132
			Consumer Cyclical - Entertainment--0.1%
	300,000		Carnival Corp., 3.75%, 11/15/2007		292,831
	20,000		International Speedway Corp. 4.2%, 4/15/2009		19,200
	80,000		International Speedway Corp. 5.4%, 4/15/2014		76,586
			TOTAL		388,617
Principal Amount					Value
			CORPORATE BONDS--continued
			Consumer Cyclical - Retailers--0.2%
$	234,693	²	CVS Corp., 5.298%, 1/11/2027	$	216,989
	60,000		Home Depot, Inc., 5.4%, 3/1/2016		57,890
	70,000		Wal-Mart Stores, Inc., 7.55%, 2/15/2030		81,391
	250,000		Wal-Mart Stores, Inc., Unsecd. Note, 3.375%, 10/1/2008		239,263
			TOTAL		595,533
			Consumer Non-Cyclical Food/Beverage--0.0%
	70,000		Bottling Group, LLC, Note, 5.5%, 4/1/2016		68,086
	75,000		Diageo Finance BV, Unsecd. Note, 3%, 12/15/2006		74,092
			TOTAL		142,178
			Consumer Non-Cyclical Health Care--0.0%
	60,000		Medtronic, Inc., Note, Series B, 4.375%, 9/15/2010		57,281
	90,000		Quest Diagnostic, Inc., 5.45%, 11/1/2015		86,585
			TOTAL		143,866
			Consumer Non-Cyclical Pharmaceuticals--0.2%
	100,000		Genentech, Inc., Note, 4.75%, 7/15/2015		92,002
	100,000		Pharmacia Corp., Sr. Deb., 6.5%, 12/1/2018		105,868
	400,000		Wyeth, Unsecd. Note, 5.5%, 2/1/2014		389,767
			TOTAL		587,637
			Consumer Non-Cyclical Supermarkets--0.0%
	80,000		Fred Meyer, Inc., Company Guarantee, 7.45%, 3/1/2008		82,197
			Consumer Non-Cyclical Tobacco--0.0%
	65,000		Altria Group, Inc., 5.625%, 11/4/2008		65,082
			Energy - Independent--0.1%
	120,000		Canadian Natural Resource, 4.9%, 12/1/2014		112,014
	25,000	²	Pemex Project Funding Master, 5.75%, 12/15/2015		23,156
	125,020	²	Ras Laffan Liquified Natural Gas, 3.437%, 9/15/2009		118,879
			TOTAL		254,049
			Energy - Integrated--0.3%
	60,000		Conoco, Inc., Sr. Note, 6.95%, 4/15/2029		65,799
	100,000		ConocoPhillips Australia Funding Co., 5.5%, 4/15/2013		99,648
	500,000		Husky Oil Ltd., Company Guarantee, 8.9%, 8/15/2028		530,574
	35,000		Petro-Canada, 7%, 11/15/2028		36,989
	100,000	²	Qatar Petroleum, 5.579%, 5/30/2011		99,684
	100,000	²	Statoil ASA, 5.125%, 4/30/2014		95,705
			TOTAL		928,399
Principal Amount					Value
			CORPORATE BONDS--continued
			Energy - Oil Field Services--0.0%
$	50,000		Noble Drilling Corp., Sr. Note, 7.5%, 3/15/2019	$	56,036
			Financial Institution - Banking--1.5%
	100,000		Bank of America Corp., Sub. Note, 7.4%, 1/15/2011		107,287
	20,000,000		Bayerische Landesbank, Sr. Unsub., Series EMTN, 1%, 9/20/2010		175,565
	105,000,000		Bank Nederlandse Gemeenten, Sr. Unsub.,.8%, 9/22/2008		931,420
	80,000		Citigroup, Inc., Note, 5.125%, 5/5/2014		77,099
	300,000		Corp Andina De Fomento, Bond, 7.375%, 1/18/2011		316,239
	200,000		First Union Institutional, Bond, 8.04%, 12/1/2026		210,399
	100,000		HSBC Finance Capital Trust, Note, 5.911%, 11/30/2035		96,412
	160,000		HSBC Finance Corp., 4.75%, 4/15/2010		154,822
	400,000		HSBC Finance Corp., 5%, 6/30/2015		370,567
	60,000		HSBC USA, Inc., Sub. Note, 6.625%, 3/1/2009		61,612
	100,000		Household Finance Corp., 6.4%, 6/17/2008		101,736
	75,000		Household Finance Corp., Unsecd. Note, 4.75%, 7/15/2013		70,059
	100,000		J.P. Morgan Chase & Co., Note, 5.35%, 3/1/2007		99,981
	250,000		J.P. Morgan Chase & Co., Sub. Note, 5.125%, 9/15/2014		237,465
	250,000		Marshall & Ilsley Bank, Sr. Note, 4.4%, 3/15/2010		240,279
	200,000		PNC Funding Corp., Sr. Note, 5.125%, 12/14/2010		196,154
	110,000		PNC Funding Corp., Sub. Note, 7.5%, 11/1/2009		116,530
	70,000		Popular North America, 5.65%, 4/15/2009		69,719
	477,778	²	Regional Diversified Funding, 9.25%, 3/15/2030		520,210
	100,000	²	Sovereign Bancorp, Inc., Sr. Note, 4.8%, 9/1/2010		96,074
	100,000		U.S. Bank N.A., 6.3%, 2/4/2014		102,986
	210,000		Wachovia Bank N.A., Sub. Note, 4.875%, 2/1/2015		195,577
	100,000		Zions Bancorp, Sub. Note, 5.5%, 11/16/2015		96,029
			TOTAL		4,644,221
			Financial Institution - Brokerage--0.6%
	190,000		Amvescap PLC, Note, 4.5%, 12/15/2009		183,422
	100,000		Amvescap PLC, Sr. Note, 5.9%, 1/15/2007		100,175
	250,000		Bear Stearns & Co., Inc., Unsecd. Note, 3.25%, 3/25/2009		235,613
	250,000	²	FMR Corp., 4.75%, 3/1/2013		234,986
	250,000		Goldman Sachs Group, Inc., 6.125%, 2/15/2033		236,629
	80,000		Goldman Sachs Group, Inc., Note, 4.125%, 1/15/2008		78,436
Principal Amount					Value
			CORPORATE BONDS--continued
			Financial Institution - Brokerage--continued
$	250,000		Lehman Brothers Holdings, 7.875%, 8/15/2010	$	270,567
	60,000		Lehman Brothers Holdings, Note, 4.8%, 3/13/2014		56,323
	100,000		Merrill Lynch & Co., Inc., Note, 6.375%, 10/15/2008		101,935
	250,000		Morgan Stanley Group, In, 5.3%, 3/1/2013		242,457
	75,000		Morgan Stanley, Note, 3.875%, 1/15/2009		72,162
	30,000		Nuveen Investments, 5%, 9/15/2010		28,924
	30,000		Nuveen Investments, 5.5%, 9/15/2015		28,196
			TOTAL		1,869,825
			Financial Institution - Finance Noncaptive--0.4%
	200,000	²	American International Group, Inc., 4.7%, 10/1/2010		191,899
	345,000		Berkshire Hathaway, Inc., Company Guarantee, 4.85%, 1/15/2015		323,262
	250,000		Capital One Financial, Note, 7.125%, 8/1/2008		257,189
	75,000		General Electric Capital Corp., Note, 6.125%, 2/22/2011		76,781
	30,000		General Electric Capital Corp., Note, Series MTN, 6.75%, 3/15/2032		32,289
	30,000		Heller Financial, Inc., Note, 7.375%, 11/1/2009		31,704
	80,000		International Lease Finance Corp., 4.875%, 9/1/2010		77,656
	90,000		Residential Capital Corp., 6%, 2/22/2011		87,355
	220,000		SLM Corp., Floating Rate Note, 12/15/2014		211,713
			TOTAL		1,289,848
			Financial Institution - Insurance - Life--1.2%
	400,000		AXA-UAP, Sub. Note, 8.6%, 12/15/2030		488,310
	1,250,000		Delphi Funding, 9.31%, 3/25/2027		1,312,071
	750,000	²	Life Re Capital Trust I, Company Guarantee, 8.72%, 6/15/2027		758,751
	300,000	²	Pacific LifeCorp., Bond, 6.6%, 9/15/2033		304,851
	750,000	²	Union Central Life Insurance Co., Note, 8.2%, 11/1/2026		791,996
			TOTAL		3,655,979
			Financial Institution - Insurance - P&C--0.3%
	50,000		Horace Mann Educators Co., Sr. Note, 6.85%, 4/15/2016		49,510
	390,000	²	Liberty Mutual Group, Inc., Unsecd. Note, 5.75%, 3/15/2014		371,443
	250,000	²	MBIA Global Funding LLC, 2.875%, 11/30/2006		246,757
	100,000	²	Oil Insurance Ltd., Sub. 5.15%, 8/15/2033		97,860
	10,000		The St. Paul Travelers Cos., Sr. Unsecd. Note, 5.5%, 12/1/2015		9,604
			TOTAL		775,174
Principal Amount					Value
			CORPORATE BONDS--continued
			Financial Institution - REITs--0.2%
$	160,000		Archstone-Smith Trust, 5.625%, 8/15/2014	$	156,064
	45,000		Mack-Cali Realty Corp., Note, 7.25%, 3/15/2009		46,669
	120,000		Prologis, Sr. Note, 5.5%, 4/1/2012		117,235
	250,000		Simon Property Group, Inc, 6.35%, 8/28/2012		255,610
	60,000		Simon Property Group, Inc, Note, 7.75%, 1/20/2011		64,622
			TOTAL		640,200
			Foreign-Local-Govt--0.0%
	50,000		Quebec, Province of, Note, Series MTN, 7.035%, 3/10/2026		57,346
			Municipal Services--0.0%
	140,000	²	Army Hawaii Family Housing, 5.524%, 6/15/2050		128,867
			Sovereign--0.0%
	30,000		United Mexican States, Series MTN, 6.75%, 9/27/2034		29,180
			Technology--0.2%
	110,000		Cisco Systems, Inc., Note, 5.25%, 2/22/2011		108,402
	200,000		Deluxe Corp., 5.125%, 10/1/2014		162,928
	60,000		Dun & Bradstreet Corp., Sr. Unsecd. Note, 5.5%, 3/15/2011		59,392
	150,000	²	Oracle Corp., Sr. Unsecd. Note, 5%, 1/15/2011		145,605
			TOTAL		476,327
			Transportation - Airlines--0.1%
	255,000		Southwest Airlines Co., 7.375%, 3/1/2027		266,379
			Transportation - Railroads--0.2%
	100,000		Burlington Northern Santa Fe Corp., 4.875%, 1/15/2015		93,545
	200,000		Canadian Pacific RR, 6.25%, 10/15/2011		205,934
	60,000		Norfolk Southern Corp., Note, 6.75%, 2/15/2011		62,752
	100,000		Union Pacific Corp., 4.875%, 1/15/2015		93,481
	45,000		Union Pacific Corp., Bond, 6.625%, 2/1/2029		46,668
			TOTAL		502,380
			Transportation - Services--0.1%
	200,000		FedEx Corp., Note, 2.65%, 4/1/2007		195,526
Principal Amount					Value
			CORPORATE BONDS--continued
			Utility - Electric--0.5%
$	250,000		Consolidated Natural Gas, 5%, 12/1/2014	$	232,646
	260,000		Duke Capital Corp., Sr. Note, 6.25%, 2/15/2013		265,515
	400,000		Exelon Generation Co. LLC, 6.95%, 6/15/2011		418,915
	300,000		FirstEnergy Corp., 5.5%, 11/15/2006		299,793
	120,000		MidAmerican Energy Co., 4.65%, 10/1/2014		111,674
	100,000		Scottish Power PLC, 4.91%, 3/15/2010		97,007
			TOTAL		1,425,550
			Utility - Natural Gas Distributor--0.1%
	210,000		Atmos Energy Corp., 4%, 10/15/2009		198,484
			Utility - Natural Gas Pipelines--0.1%
	100,000		Kinder Morgan Energy Partners, Sr. Unsecd. Note, 5.8%, 3/15/2035		85,686
	60,000		Kinder Morgan Energy Partners LP, 6.75%, 3/15/2011		61,257
			TOTAL		146,943
			TOTAL CORPORATE BONDS (IDENTIFIED COST $26,229,499)		25,701,015
			CORPORATE NOTES--0.0%
	125,000		Telecom Italia Capital, Note, 4.875%, 10/01/2010 (IDENTIFIED COST $124,961)		120,301
			GOVERNMENT AGENCIES--2.0%
	1,100,000		Federal Home Loan Bank, 4.625% 2/18/2011		1,059,669
	415,000		Federal Home Loan Mortgage Corp., 6.250%, 7/15/2032		451,854
	3,000,000		Federal National Mortgage Association, 4.250%, 5/15/2009		2,912,606
	1,700,000		Federal National Mortgage Association, 4.375%, 3/15/2013		1,601,623
	100,000		Federal National Mortgage Association, 4.500%, 6/1/2010		96,494
	40,000		Federal National Mortgage Association, 7.125%, 1/15/2030		47,936
			TOTAL GOVERNMENT AGENCIES (IDENTIFIED COST $6,357,019)		6,170,182
			GOVERNMENTS/AGENCIES--0.4%
	85,000,000		Italy, Series INTL, 0.65%, 3/20/2009		748,494
	132,000		United Kingdom, Government of, Treasury Bill, 5%, 3/7/2012		251,281
	175,000		United Mexican States, 6.625%, 3/3/2015		177,240
			TOTAL GOVERNMENTS/AGENCIES (IDENTIFIED COST $1,195,199)		1,177,015
Principal Amount					Value
			MORTGAGE-BACKED SECURITIES--0.7%
$	70,468		Federal Home Loan Mortgage Corp. Pool A19963, 5.500%, 3/1/2034	$	68,092
	17,234		Federal Home Loan Mortgage Corp. Pool C00592, 7.000%, 3/1/2028		17,701
	14,115		Federal Home Loan Mortgage Corp. Pool C00896, 7.500%, 12/1/2029		14,688
	32,471		Federal Home Loan Mortgage Corp. Pool C17281, 6.500%, 11/1/2028		33,035
	32,382		Federal Home Loan Mortgage Corp. Pool C19588, 6.500%, 12/1/2028		32,944
	10,800		Federal Home Loan Mortgage Corp. Pool C25621, 6.500%, 5/1/2029		10,967
	47,154		Federal Home Loan Mortgage Corp. Pool C76361, 6.000%, 2/1/2033		46,718
	134,123		Federal Home Loan Mortgage Corp. Pool E01545, 5.000%, 15 Year, 1/1/2019		129,734
	39,963		Federal Home Loan Mortgage Corp. Pool E20252, 7.000%, 15 Year, 7/1/2011		40,736
	3,845		Federal Home Loan Mortgage Corp. Pool E77591, 6.500%, 7/1/2014		3,905
	34,877		Federal Home Loan Mortgage Corp. Pool E99510, 5.500%, 9/1/2018		34,364
	40,276		Federal Home Loan Mortgage Corp. Pool G01444, 6.500%, 8/1/2032		40,818
	225,820		Federal Home Loan Mortgage Corp. Pool G08010, 5.500%, 9/1/2034		218,064
	68,273		Federal Home Loan Mortgage Corp. Pool M90876, 4.000%, 11/1/2008		66,087
	29,036		Federal National Mortgage Association Pool 251697, 6.500%, 30 Year, 5/1/2028		29,487
	63,871		Federal National Mortgage Association Pool 252334, 6.500%, 30 Year, 2/1/2029		63,809
	150,229		Federal National Mortgage Association Pool 254720, 4.500%, 5/1/2018		142,573
	143,062		Federal National Mortgage Association Pool 254802, 4.500%, 7/1/2018		135,770
	62,387		Federal National Mortgage Association Pool 254905, 6.000%, 10/1/2033		61,742
	126,705		Federal National Mortgage Association Pool 255075, 5.500%, 2/1/2024		123,141
	157,801		Federal National Mortgage Association Pool 255079, 5.000%, 2/1/2019		152,737
	7,086		Federal National Mortgage Association Pool 303168, 9.500%, 30 Year, 2/1/2025		7,853
	3,816		Federal National Mortgage Association Pool 323159, 7.500%, 4/1/2028		3,975
	29,478		Federal National Mortgage Association Pool 323640, 7.500%, 4/1/2029		30,711
	1,975		Federal National Mortgage Association Pool 323970, 7.000%, 15 Year, 10/1/2014		2,016
	65,150		Federal National Mortgage Association Pool 428865, 7.000%, 6/1/2028		66,979
	7,273		Federal National Mortgage Association Pool 443215, 6.000%, 10/1/2028		7,210
	5,073		Federal National Mortgage Association Pool 511365, 7.000%, 8/1/2029		5,212
	581		Federal National Mortgage Association Pool 514184, 7.500%, 9/1/2029		603
	133,275		Federal National Mortgage Association Pool 545993, 6.000%, 11/1/2032		131,917
	51,690		Federal National Mortgage Association Pool 555272, 6.000%, 3/1/2033		51,172
Principal Amount					Value
			MORTGAGE-BACKED SECURITIES--continued
$	103,032		Federal National Mortgage Association Pool 713974, 5.500%, 7/1/2033	$	99,510
	140,701		Federal National Mortgage Association Pool 721502, 5.000%, 7/1/2033		132,491
	2,634		Government National Mortgage Association Pool 352214, 7.000%, 4/15/2023		2,743
	13,664		Government National Mortgage Association Pool 451522, 7.500%, 30 Year, 10/15/2027		14,345
	28,322		Government National Mortgage Association Pool 462556, 6.500%, 2/15/2028		28,973
	1,607		Government National Mortgage Association Pool 462739, 7.500%, 5/15/2028		1,687
	2,227		Government National Mortgage Association Pool 464835, 6.500%, 9/15/2028		2,279
	17,852		Government National Mortgage Association Pool 469699, 7.000%, 11/15/2028		18,541
	24,065		Government National Mortgage Association Pool 486760, 6.500%, 12/15/2028		24,611
	4,521		Government National Mortgage Association Pool 780339, 8.000%, 30 Year, 12/15/2023		4,735
	29,529		Government National Mortgage Association Pool 780453, 7.500%, 30 Year, 12/15/2025		31,036
	26,941		Government National Mortgage Association Pool 780584, 7.000%, 30 Year, 6/15/2027		28,049
			TOTAL MORTGAGE-BACKED SECURITIES (IDENTIFIED COST $2,231,468)		2,163,760
			U.S. TREASURY--10.2%
	1,830,833		U.S. Treasury Inflation Protected Note, Series A-2015, 1.625%, 1/15/2015		1,716,448
	8,100,000	³	United States Treasury Bill, 6/1/2006		8,100,000
	8,100,000	³	United States Treasury Bill, 6/29/2006		8,070,611
	600,000		United States Treasury Bond, 4.500%, 2/15/2036		534,507
	900,000		United States Treasury Bond, 6.250%, 8/15/2023		987,319
	5,700,000		United States Treasury Note, 3.875%, 2/15/2013		5,308,582
	200,000		United States Treasury Note, 3.875%, 7/15/2010		191,554
	500,000		United States Treasury Note, 4.000%, 2/15/2014		464,409
	35,000		United States Treasury Note, 4.375%, 8/15/2012		33,714
	1,400,000		United States Treasury Note, 4.500%, 2/15/2016		1,331,131
	3,650,000		United States Treasury Note, 4.750%, 3/31/2011		3,602,378
	300,000		United States Treasury Note, 4.750%, 5/15/2014		292,778
	40,000		United States Treasury Note, 5.000%, 2/15/2011		39,974
	25,000		United States Treasury Note, 5.000%, 8/15/2011		24,970
	165,000		United States Treasury PO Strip, 11/15/2015		101,784
	170,000		United States Treasury PO Strip, 11/15/2018		88,108
	190,000		United States Treasury PO Strip, 5/15/2020		90,428
	225,000		United States Treasury PO Strip, 8/15/2025		80,648
			TOTAL U.S. TREASURY (IDENTIFIED COST $31,468,948)		31,059,343
Shares or Principal Amount					Value
			MUTUAL FUNDS--19.7%⁴
	62,331		Emerging Markets Fixed Income Core Fund	$	1,154,633
	2,510,448		Federated International Capital Appreciation Fund, Class A		29,221,619
	2,602,914		Federated Mortgage Core Portfolio		25,170,181
	684,317		High Yield Bond Portfolio		4,598,612
			TOTAL MUTUAL FUNDS (IDENTIFIED COST $54,575,148)		60,145,045
			REPURCHASE AGREEMENT--5.5%
$	16,779,000		Interest in $3,100,000,000 joint repurchase agreement 5.050%, dated 5/31/2006 under which UBS Securities LLC will repurchase U.S. Treasury and U.S. Government Agency securities with various maturities to 5/25/2036 for $3,100,434,861 on 6/1/2006. The market value of the underlying securities at the end of the period was $3,177,005,067. (AT COST)		16,779,000
			TOTAL INVESTMENTS--102.6% (IDENTIFIED COST $290,953,852)⁵		313,089,575
			OTHER ASSETS AND LIABILITIES - NET--(2.6)%		(8,079,606	)
			TOTAL NET ASSETS--100%	$	305,009,969

1 Non-income producing security.

2 Denotes a restricted security, including securities purchased under Rule 144A of the Securities Act of 1933. These securities, all of which have been deemed liquid by criteria approved by the Fund's Board of Director's, unless registered under the Act or exempted from registration, may only be sold to qualified institutional investors. At May 31, 2006, these securities amounted to $5,186,452 which represents 1.7% of total net assets.

3 Pledged as collateral to ensure the Fund is able to satisfy the obligations of its outstanding long futures contracts.

4 Affiliated companies.

5 The cost of investments for federal tax purposes amounts to $290,741,067.

At May 31, 2006, the Fund had the following outstanding futures contracts:

Contracts		Number of Contracts		Notional Value		Expiration Date		Unrealized Depreciation
S&P 500 Index Futures¹		24		$7,632,600		June 2006		$90,150

Note: The categories of investments are shown as a percentage of total net assets at May 31, 2006.

The following acronyms are used throughout this portfolio:

ADR	--American Depositary Receipt
MTN	--Medium Term Note
PO	--Principal Only
REITs	--Real Estate Investment Trusts
REMIC	--Real Estate Mortgage Investment Conduit

See Notes which are an integral part of the Financial Statements

Statement of Assets and Liabilities

May 31, 2006 (unaudited)

Assets:
Total investments in securities, at value including $60,145,045 of investments in affiliated issuers (Note 5) (identified cost $290,953,852)			$	313,089,575
Cash				2,611
Cash denominated in foreign currencies (cost of $210,824)				211,460
Income receivable				924,934
Receivable for investments sold				4,131,921
Receivable for shares sold				162,224
Receivable for daily variation margin				72,600
TOTAL ASSETS				318,595,325
Liabilities:
Payable for investments purchased	$	11,875,978
Payable for shares redeemed		1,346,119
Income distribution payable		106,781
Payable for transfer and dividend disbursing agent fees and expenses		122,017
Payable for Directors'/Trustees' fee		1,486
Payable for distribution services fee (Note 5)		55,887
Payable for shareholder services fee (Note 5)		57,610
Accrued expenses		19,478
TOTAL LIABILITIES				13,585,356
Net assets for 16,176,955 shares outstanding			$	305,009,969
Net Assets Consist of:
Paid- in capital			$	271,117,944
Net unrealized appreciation of investments, translation of assets and liabilities in foreign currency and futures contracts				22,058,995
Accumulated net realized gain on investments, foreign currency transactions and futures contracts				11,801,355
Undistributed net investment income				31,675
TOTAL NET ASSETS			$	305,009,969

Statement of Assets and Liabilities-continued

May 31, 2006 (unaudited)

Net Asset Value, Offering Price and Redemption Proceeds Per Share
Class A Shares:
Net asset value per share ($217,243,157 ÷ 11,515,558 shares outstanding), $0.001 par value, 750,000,000 shares authorized						$18.87
Offering price per share (100/94.50 of $18.87)¹						$19.97
Redemption proceeds per share						$18.87
Class B Shares:
Net asset value per share ($55,014,098 ÷ 2,919,888 shares outstanding), $0.001 par value, 500,000,000 shares authorized						$18.84
Offering price per share						$18.84
Redemption proceeds per share (94.50/100 of $18.84)¹						$17.80
Class C Shares:
Net asset value per share ($27,027,800 ÷ 1,438,505 shares outstanding), $0.001 par value, 500,000,000 shares authorized						$18.79
Offering price per share (100/99.00 of $18.79)¹						$18.98
Redemption proceeds per share (99.00/100 of $18.79)¹						$18.60
Class K Shares:
Net asset value per share ($5,724,914 ÷ 303,004 shares outstanding), $0.001 par value, 250,000,000 shares authorized						$18.89
Offering price per share						$18.89
Redemption proceeds per share						$18.89

1 See "What Do Shares Cost?" in the Prospectus.

See Notes which are an integral part of the Financial Statements

Statement of Operations

Six Months Ended May 31, 2006 (unaudited)

Investment Income:
Dividends (including $1,142,224 received from affiliated issuers (Note 5) and net of foreign taxes withheld of $9,527)			$	2,753,663
Interest				2,189,004
Interest income allocated from affiliated partnership (Note 5)				60,132
TOTAL INCOME				5,002,799
Expenses:
Investment adviser fee (Note 5)	$	1,118,524
Administrative personnel and services fee (Note 5)		134,631
Custodian fees		16,014
Transfer and dividend disbursing agent fees and expenses--Class A Shares		154,556
Transfer and dividend disbursing agent fees and expenses-- Class B Shares		53,826
Transfer and dividend disbursing agent fees and expenses-- Class C Shares		20,659
Transfer and dividend disbursing agent fees and expenses-- Class K Shares		5,928
Directors'/Trustees' fees		6,352
Auditing fees		15,968
Legal fees		1,354
Portfolio accounting fees		65,050
Distribution services fee--Class B Shares (Note 5)		225,481
Distribution services fee--Class C Shares (Note 5)		105,220
Distribution services fee--Class K Shares (Note 5)		8,397
Shareholder services fee--Class A Shares (Note 5)		281,868
Shareholder services fee--Class B Shares (Note 5)		75,160
Shareholder services fee--Class C Shares (Note 5)		34,525
Share registration costs		26,754
Printing and postage		30,029
Insurance premiums		4,598
Taxes		12,359
Miscellaneous		4,605
EXPENSES BEFORE ALLOCATION		2,401,858
Expenses allocated from affiliated partnership (Note 5)		679
TOTAL EXPENSES		2,402,537

Statement of Operations-continued

Six Months Ended May 31, 2006 (unaudited)

Waivers, Reimbursements, and Expense Reduction (Note 5):
Waiver/Reimbursement of investment adviser fee	$	(147,896	)
Waiver of administrative personnel and services fee		(11,459	)
Waiver/Reimbursement of shareholder services fee--Class A Shares		(42,112	)
Waiver/Reimbursement of shareholder services fee--Class B Shares		(5,984	)
Waiver/Reimbursement of shareholder services fee--Class C Shares		(2,643	)
Fees paid indirectly from directed broker arrangements		(2,654	)
TOTAL WAIVERS, REIMBURSEMENTS AND EXPENSE REDUCTION				(212,748	)
Net expenses						$	2,189,789
Net investment income							2,813,010
Realized and Unrealized Gain (Loss) on Investments, Foreign Currency Transactions, and Futures Contracts:
Net realized gain on investments and foreign currency transactions (including realized gain of $488,628 on sales of investments in affiliated issuers (Note 5)							17,132,859
Net realized gain on futures contracts							916,764
Net realized gain allocated from partnership							42,296
Net change in unrealized depreciation of investments, translation of assets and liabilities in foreign currency and futures contracts							(13,722,186	)
Net realized and unrealized gain on investments, foreign currency transactions and futures contracts							4,369,733
Change in net assets resulting from operations						$	7,182,743

See Notes which are an integral part of the Financial Statements

Statement of Changes in Net Assets

		Six Months Ended (unaudited) 5/31/2006			Year Ended 11/30/2005
Increase (Decrease) in Net Assets
Operations:
Net investment income	$	2,813,010		$	4,640,955
Net realized gain on investments, including allocation from partnership, foreign currency transactions and futures contracts		18,091,919			9,339,087
Net increase due to reimbursement from adviser (Note 5)		--			13,304
Net change in unrealized appreciation/depreciation of investments, translation of assets and liabilities in foreign currency and futures contracts		(13,722,186	)		500,468
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS		7,182,743			14,493,814
Distributions to Shareholders:
Distributions from net investment income
Class A Shares		(2,095,001	)		(3,705,846	)
Class B Shares		(305,170	)		(540,766	)
Class C Shares		(152,969	)		(239,731	)
Class K Shares		(26,130	)		(6,728	)
Distributions from net realized gains on investments and foreign currency transactions
Class A Shares		(4,090,513	)		--
Class B Shares		(1,100,262	)		--
Class C Shares		(507,292	)		--
Class K Shares		(21,265	)		--
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS		(8,298,602	)		(4,493,071	)
Share Transactions:
Proceeds from sale of shares		30,564,592			49,031,333
Proceeds from shares issued in connection with the tax-free transfer of assets from Vintage Balanced Fund		--			18,652,463
Net asset value of shares issued to shareholders in payment of distributions declared		7,524,674			4,158,766
Cost of shares redeemed		(59,289,280	)		(92,624,758	)
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS		(21,200,014	)		(20,782,196	)
Change in net assets		(22,315,873	)		(10,781,453	)
Net Assets:
Beginning of period		327,325,842			338,107,295
End of period (including undistributed (distributions in excess) of net investment income of $31,675 and $(202,065), respectively)	$	305,009,969		$	327,325,842

See Notes which are an integral part of the Financial Statements

Notes to Financial Statements

May 31, 2006 (unaudited)

1. ORGANIZATION

Federated Stock and Bond Fund, Inc. (the "Fund") is registered under the Investment Company Act of 1940, as amended (the "Act"), as a diversified, open-end management investment company. The Fund offers four classes of shares: Class A Shares, Class B Shares, Class C Shares and Class K Shares. All shares of the Fund have equal rights with respect to voting, except on class-specific matters. The primary investment objective of the Fund is to provide relative safety of capital with the possibility of long-term growth of capital and income. Consideration is also given to current income.

On September 18, 2005, the Fund received a tax-free transfer of assets from the Vintage Balanced Fund, as follows:

		Class A Shares of the Fund Issued		Vintage Balanced Fund Net Assets Received		Unrealized Appreciation¹		Net Assets of the Fund Prior to Combination		Net Assets of Vintage Balanced Fund Immediately Prior to Combination		Net Assets of the Fund Immediately After Combination
Vintage Balanced Fund		979,639		$18,652,463		$2,709,188		$320,450,050		$18,652,463		$339,102,513

1 Unrealized appreciation is included in the Vintage Balanced Fund Net Assets Received amount shown above.

2. SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles (GAAP) in the United States of America.

Investment Valuation

Domestic and foreign equity securities are valued at the last sale price or official closing price reported in the market in which they are primarily traded (either a national securities exchange or the over-the-counter market), if available. If unavailable, the security is generally valued at the mean between the last closing bid and asked prices. With respect to valuation of foreign securities, trading in foreign cities may be completed at times which vary from the closing of the New York Stock Exchange ("NYSE"). Therefore, foreign securities are valued at the latest closing price on the exchange on which they are traded immediately prior to the closing of the NYSE. Foreign securities quoted in foreign currencies are translated in U.S. dollars at the foreign exchange rate in effect at 4:00 p.m., Eastern Time, on the day the value of the foreign security is determined. The Fund generally values fixed-income and short-term securities according to prices furnished by an independent pricing service, except that securities with remaining maturities of less than 60 days at the time of purchase may be valued at amortized cost, which approximates fair market value. For mortgage-backed securities, prices furnished by the independent pricing service are based on the aggregate investment value of the projected cash flows to be generated by the security. For other fixed-income and short-term securities, prices furnished by an independent pricing service are intended to be indicative of the mean between the bid and asked prices currently offered to institutional investors for the securities. Investments in other open-end regulated investment companies are valued at net asset value. Securities for which no quotations are readily available or whose values have been affected by a significant event occurring between the close of their primary markets and the closing of the NYSE are valued at fair value as determined in accordance with procedures established by and under general supervision of the Board of Directors (the "Directors").

Repurchase Agreements

It is the policy of the Fund to require the other party to a repurchase agreement to transfer to the Fund's custodian or sub-custodian eligible securities or cash with a market value (after transaction costs) at least equal to the repurchase price to be paid under the repurchase agreement. The eligible securities are transferred to accounts with the custodian or sub-custodian in which the Fund holds a "securities entitlement" and exercises "control" as those terms are defined in the Uniform Commercial Code. The Fund has established procedures for monitoring the market value of the transferred securities and requiring the transfer of additional eligible securities if necessary to equal at least the repurchase price. These procedures also allow the other party to require securities to be transferred from the account to the extent that their market value exceeds the repurchase price or in exchange for other eligible securities of equivalent market value.

With respect to agreements to repurchase U.S. government securities and cash items, the Fund treats the repurchase agreement as an investment in the underlying securities and not as an obligation of the other party to the repurchase agreement. Other repurchase agreements are treated as obligations of the other party secured by the underlying securities. Nevertheless, the insolvency of the other party or other failure to repurchase the securities may delay the disposition of the underlying securities or cause the Fund to receive less than the full repurchase price. Under the terms of the repurchase agreement, any amounts received by the Fund in excess of the repurchase price and related transaction costs must be remitted to the other party.

The Fund may enter into repurchase agreements in which eligible securities are transferred into joint trading accounts maintained by the custodian or sub-custodian for investment companies and other clients advised by the Adviser and its affiliates. The Fund will participate on a pro rata basis with the other investment companies and clients in its share of the securities transferred under such repurchase agreements and in its share of proceeds from any repurchase or other disposition of such securities.

Investment Income, Gains and Losses, Expenses and Distributions

Interest income and expenses are accrued daily. Dividend income and distributions to shareholders are recorded on the ex-dividend date. Distributions of net investment income are declared and paid quarterly. Non-cash dividends included in dividend income, if any, are recorded at fair value. Investment income, realized and unrealized gains and losses, and certain fund-level expenses are allocated to each class based on relative average daily net assets, except that each class bears certain expenses unique to that class such as transfer and dividend disbursing agent, distribution and shareholder services fees. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.

Premium and Discount Amortization/Paydown Gains and Losses

All premiums and discounts on fixed-income securities are amortized/accreted for financial statement purposes. Gains and losses realized on principal payment of mortgage backed securities (paydown gains and losses) are classified as part of investment income.

Federal Taxes

It is the Fund's policy to comply with the Subchapter M provision of the Internal Revenue Code (the "Code") and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal income tax is necessary.

Withholding taxes, and where appropriate, deferred withholding taxes, on foreign interest, dividends and capital gains have been provided for in accordance with the applicable country's tax rules and rates.

Other Taxes

As an open-end management investment company incorporated in the state of Maryland but domiciled in Pennsylvania, the Fund is subject to the Pennsylvania Franchise Tax. This franchise tax is assessed annually on the value of the Fund, as represented by average net assets for the tax year.

When-Issued and Delayed Delivery Transactions

The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.

Foreign Currency Translation

The accounting records of the Fund are maintained in U.S. dollars. All assets and liabilities denominated in foreign currencies (FCs) are translated into U.S. dollars based on the rates of exchange of such currencies against U.S. dollars on the date of valuation. Purchases and sales of securities, income and expenses are translated at the rate of exchange quoted on the respective date that such transactions are recorded. The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.

Reported net realized foreign exchange gains or losses arise from sales of portfolio securities, sales and maturities of short-term securities, sales of FCs, currency gains or losses realized between the trade and settlement dates on securities transactions, the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Fund's books, and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end, resulting from changes in the exchange rate.

Futures Contracts

The Fund purchases stock index futures contracts to manage cashflows, enhance yield and to potentially reduce transaction costs. Upon entering into a stock index futures contract with a broker, the Fund is required to deposit in a segregated account a specified amount of cash or U.S. government securities. Futures contracts are valued daily and unrealized gains or losses are recorded in a "variation margin" account. Daily, the Fund receives from or pays to the broker a specified amount of cash based upon changes in the variation margin account. When a contract is closed, the Fund recognizes a realized gain or loss. Futures contracts have market risks, including the risk that the change in the value of the contract may not correlate with the changes in the value of the underlying securities. For the six months ended May 31, 2006, the Fund had net realized gains of $916,764 on futures contracts.

Futures contracts outstanding at period end, if any, are listed after the fund's portfolio of investments.

Restricted Securities

Restricted securities are securities that may only be resold upon registration under federal securities laws or in transactions exempt from such registration. In some cases, the issuer of restricted securities has agreed to register such securities for resale, at the issuer's expense either upon demand by the Fund or in connection with another registered offering of the securities. Many restricted securities may be resold in the secondary market in transactions exempt from registration. Such restricted securities may be determined to be liquid under criteria established by the Directors. The Fund will not incur any registration costs upon such resales. The Fund's restricted securities are valued at the price provided by dealers in the secondary market or, if no market prices are available, at the fair value as determined in accordance with procedures established by and under general supervision of the Directors.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.

Other

Investment transactions are accounted for on a trade date basis. Realized gains and losses from investment transactions are recorded on an identified cost basis.

3. CAPITAL STOCK

The following tables summarize capital stock activity:

	Six Months Ended 5/31/2006					Year Ended 11/30/2005
Class A Shares:	Shares			Amount		Shares			Amount
Shares sold	1,000,544		$	19,143,139		1,765,013		$	33,062,298
Shares issued in connection with the tax-free transfer of assets from Vintage Balanced Fund	--			--		979,639			18,652,463
Shares issued to shareholders in payment of distributions declared	296,657			5,589,689		183,414			3,452,796
Shares redeemed	(2,137,703	)		(40,928,562	)	(3,488,768	)		(65,395,950	)
NET CHANGE RESULTING FROM CLASS A SHARE TRANSACTIONS	(840,502	)	$	(16,195,734	)	(560,702	)	$	(10,228,393	)

	Six Months Ended 5/31/2006					Year Ended 11/30/2005
Class B Shares:	Shares			Amount		Shares			Amount
Shares sold	105,601		$	2,010,998		355,033		$	6,625,152
Shares issued to shareholders in payment of distributions declared	69,176			1,299,840		25,959			488,413
Shares redeemed	(590,600	)		(11,294,028	)	(1,070,664	)		(20,003,441	)
NET CHANGE RESULTING FROM CLASS B SHARE TRANSACTIONS	(415,823	)	$	(7,983,190	)	(689,672	)	$	(12,889,876	)

	Six Months Ended 5/31/2006					Year Ended 11/30/2005
Class C Shares:	Shares			Amount		Shares			Amount
Shares sold	203,595		$	3,881,978		447,096		$	8,314,721
Shares issued to shareholders in payment of distributions declared	31,389			588,298		11,234			210,829
Shares redeemed	(328,127	)		(6,253,215	)	(384,777	)		(7,163,700	)
NET CHANGE RESULTING FROM CLASS C SHARE TRANSACTIONS	(93,143	)	$	(1,782,939	)	73,553		$	1,361,850

	Six Months Ended 5/31/2006					Year Ended 11/30/2005
Class K Shares:	Shares			Amount		Shares			Amount
Shares sold	287,733		$	5,528,477		54,661		$	1,029,162
Shares issued to shareholders in payment of distributions declared	2,480			46,847		356			6,728
Shares redeemed	(42,445	)		(813,475	)	(3,302	)		(61,667	)
NET CHANGE RESULTING FROM CLASS K SHARE TRANSACTIONS	247,768		$	4,761,849		51,715		$	974,223
NET CHANGE RESULTING FROM SHARE TRANSACTIONS	(1,101,700	)	$	(21,200,014	)	(1,125,106	)	$	(20,782,196	)

4. FEDERAL TAX INFORMATION

At May 31, 2006, the cost of investments for federal tax purposes was $290,741,067. The net unrealized appreciation of investments for federal tax purposes excluding any unrealized appreciation resulting from changes in foreign currency exchange rates and any unrealized depreciation from futures contracts was $22,348,508. This consists of net unrealized appreciation from investments for those securities having an excess of value over cost of $27,221,932 and net unrealized depreciation from investments for those securities having an excess of cost over value of $4,873,424.

At November 30, 2005, the Fund had a capital loss carryforward of $3,954,320 which will reduce the Fund's taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Code and thus will reduce the amount of distributions to shareholders which would otherwise be necessary to relieve the Fund of any liability for federal income tax. Pursuant to the Code, such capital loss carryforward will expire as follows:

Expiration Year		Expiration Amount
2009		$2,709,693
2010		$1,244,627

As a result of a tax-free transfer of assets from Founders Common Trust Fund, certain capital loss carryforwards listed above may be limited.

5. INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES

Investment Adviser Fee

Federated Equity Management Company of Pennsylvania, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment adviser fee equal to: (a) a maximum of 0.55% of the average daily net assets of the Fund; and (b) 4.50% of the gross income of the Fund, excluding capital gains or losses. The Adviser may voluntarily choose to waive any portion of its fee. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion. For the six months ended May 31, 2006, the Adviser voluntarily waived $4,590 of its fee.

Certain of the Fund's assets are managed by Federated Investment Management Company (the "Sub-Adviser"). Under the terms of a sub-adviser agreement between the Adviser and the Sub-Adviser, the Sub-Adviser receives an allocable portion of the Fund's adviser fee. The fee is paid by the Adviser out of its resources and is not an incremental Fund expense. For the six months ended May 31, 2006, the Sub-Adviser earned a sub-adviser fee of $130,892.

Administrative Fee

Federated Administrative Services (FAS), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. The fee paid to FAS is based on the average aggregate daily net assets of certain Federated funds as specified below:

Maximum Administrative Fee		Average Aggregate Daily Net Assets of the Federated Funds
0.150%		on the first $5 billion
0.125%		on the next $5 billion
0.100%		on the next $10 billion
0.075%		on assets in excess of $20 billion

The administrative fee received during any fiscal year shall be at least $150,000 per portfolio and $40,000 per each additional class of Shares. FAS may voluntarily choose to waive any portion of its fee. FAS can modify or terminate this voluntary waiver at any time at its sole discretion. For the six months ended May 31, 2006, the net fee paid to FAS was 0.076% of average aggregate daily net assets of the Fund.

Distribution Services Fee

The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will compensate Federated Securities Corp. (FSC), the principal distributor, from the daily net assets of the Fund's Class B Shares, Class C Shares and Class K Shares to finance activities intended to result in the sale of these shares. The Plan provides that the Fund may incur distribution expenses according to the following schedule annually, to compensate FSC:

Share Class Name		Percentage of Average Daily Net Assets of Class
Class B Shares		0.75%
Class C Shares		0.75%
Class K Shares		0.50%

FSC may voluntarily choose to waive any portion of its fee. FSC can modify or terminate this voluntary waiver at any time at its sole discretion. When FSC receives fees, it may pay some or all of them to financial intermediaries whose customers purchase shares. For the six months ended May 31, 2006, FSC retained $19,474 of fees paid by the Fund.

Sales Charges

For the six months ended May 31, 2006, FSC retained $8,032 in sales charges from the sale of Class A Shares. FSC also retained $254 of contingent deferred sales charges relating to redemptions of Class C Shares. See "What Do Shares Cost?" in the Prospectus.

Shareholder Services Fee

The Fund may pay fees (Service Fees) up to 0.25% of the average daily net assets of the Fund's Class A Shares, Class B Shares and Class C Shares to financial intermediaries or to Federated Shareholder Services Company (FSSC), for providing services to shareholders and maintaining shareholder accounts. FSSC or these financial intermediaries may voluntarily choose to waive any portion of their fee. This voluntary waiver can be modified or terminated at any time. For the six months ended May 31, 2006, FSSC voluntarily waived $30,458 of its fee. For the six months ended May 31, 2006, FSSC received $11,334 of fees paid by the Fund.

The Fund may invest in other funds serviced by FSSC under this agreement. FSSC has agreed to reimburse the Fund for certain shareholder services fees received by FSSC as a result of these transactions.

Commencing on August 1, 2005, and continuing through January 28, 2006, FSSC reimbursed daily a portion of the shareholder services fee. This reimbursement resulted from an administrative delay in the implementation of contractual terms of the shareholder service fee agreement. This reimbursement amounted to $20,281 for the six months ended May 31, 2006.

Expense Reduction

The Fund directs portfolio trades to a broker that in turn pays a portion of the Fund's operating expenses. For the six months ended May 31, 2006, the Fund's expenses were reduced by $2,654 under these arrangements.

Other

For the year ended November 30, 2005, the Fund's Adviser made a voluntary contribution to the Fund of $13,304 for losses on investments inadvertently sold by the Fund.

General

Certain of the Officers and Directors of the Fund are Officers and Directors or Trustees of the above companies.

Transactions with Affiliated Companies

Affiliated holdings are mutual funds which are managed by the Adviser or an affiliate of the Adviser. The Adviser has agreed to reimburse the Fund for certain investment adviser fees as a result of transactions in other mutual funds. Transactions with affiliated companies during the six months ended May 31, 2006, are as follows:

Affiliates	Balance of Shares Held 11/30/2005	Purchases/ Additions	Sales/ Reductions	Balance of Shares Held 5/31/2006	Value	Dividend Income
Emerging Markets Fixed Income Core Fund	89,631	--	(27,300)	62,331	$ 1,154,633	$ --
Federated International Capital Appreciation Fund	2,781,696	--	(271,248)	2,510,448	29,221,619	248,534
Federated Mortgage Core Portfolio	2,768,532	240,473	(406,091)	2,602,914	25,170,181	661,342
High Yield Bond Portfolio	824,035	34,491	(174,209)	684,317	4,598,612	232,348
TOTAL OF AFFILIATED TRANSACTIONS					$60,145,045	$1,142,224

6. INVESTMENT TRANSACTIONS

Purchases and sales of investments, excluding long-term U.S. government securities and short-term obligations, for the six months ended May 31, 2006, were as follows:

Purchases		$	142,074,737
Sales		$	148,638,189

7. LEGAL PROCEEDINGS

Beginning in October 2003, Federated Investors, Inc. and various subsidiaries thereof (including the advisers and distributor for various investment companies, collectively, "Federated"), along with various investment companies sponsored by Federated ("Funds") were named as defendants in several class action lawsuits now pending in the United States District Court for the District of Maryland. The lawsuits were purportedly filed on behalf of people who purchased, owned and/or redeemed shares of Federated-sponsored mutual funds during specified periods beginning November 1, 1998. The suits are generally similar in alleging that Federated engaged in illegal and improper trading practices including market timing and late trading in concert with certain institutional traders, which allegedly caused financial injury to the mutual fund shareholders. These lawsuits began to be filed shortly after Federated's first public announcement that it had received requests for information on shareholder trading activities in the Funds from the Securities and Exchange Commission ("SEC"), the Office of the New York State Attorney General ("NYAG"), and other authorities. In that regard, on November 28, 2005, Federated announced that it had reached final settlements with the SEC and the NYAG with respect to those matters. As Federated previously reported in 2004, it has already paid approximately $8.0 million to certain funds as determined by an independent consultant. As part of these settlements, Federated agreed to pay for the benefit of fund shareholders additional disgorgement and a civil money penalty in the aggregate amount of an additional $72 million. Federated and various Funds have also been named as defendants in several additional lawsuits, the majority of which are now pending in the United States District Court for the Western District of Pennsylvania, alleging, among other things, excessive advisory and Rule 12b-1 fees. The Board of the Funds has retained the law firm of Dickstein Shapiro LLP to represent the Funds in these lawsuits. Federated and the Funds, and their respective counsel, are reviewing the allegations and intend to defend this litigation. Additional lawsuits based upon similar allegations may be filed in the future. The potential impact of these lawsuits, all of which seek unquantified damages, attorneys' fees and expenses, and future potential similar suits is uncertain. Although we do not believe that these lawsuits will have a material adverse effect on the Funds, there can be no assurance that these suits, the ongoing adverse publicity and/or other developments resulting from the regulatory investigations will not result in increased Fund redemptions, reduced sales of Fund shares, or other adverse consequences for the Funds.

Evaluation and Approval of Advisory Contract

FEDERATED STOCK AND BOND FUND, INC. (THE "FUND")

The Fund's Board reviewed the Fund's investment advisory contract and subadvisory contract at meetings held in May 2006. The Board's decision regarding these contracts reflects the exercise of its business judgment on whether to continue the existing arrangements.

Prior to the meeting, the Adviser had recommended that the Federated Funds appoint a Senior Officer, whose duties include specified responsibilities relating to the process by which advisory fees are to be charged to a Federated Fund. The Senior Officer appointed by the Funds has the authority to retain consultants, experts, or staff as may be reasonably necessary to assist in the performance of his duties, reports directly to the Board, and may be terminated only with the approval of a majority of the independent members of the Board. The Senior Officer prepared and furnished to the Board an independent written evaluation that covered topics discussed below, which the Board considered, along with other information, in deciding to approve the advisory contract and subadvisory contract.

During its review of these contracts, the Board considered compensation and benefits received by the Adviser and subadviser. This included the fees received for services provided to the Fund by other entities in the Federated organization and research services received by the Adviser from brokers that execute Federated fund trades, as well as advisory fees. The Board is also familiar with judicial decisions concerning allegedly excessive investment advisory fees which have indicated that the following factors may be relevant to an Adviser's fiduciary duty with respect to its receipt of compensation from a fund: the nature and quality of the services provided by the Adviser, including the performance of the Fund; the Adviser's cost of providing the services; the extent to which the Adviser may realize "economies of scale" as the Fund grows larger; any indirect benefits that may accrue to the Adviser and its affiliates as a result of the Adviser's relationship with the Fund; performance and expenses of comparable funds; and the extent to which the independent Board members are fully informed about all facts the Board deems relevant bearing on the Adviser's services and fees. The Board further considered management fees (including any components thereof) charged to institutional and other clients of the Adviser for like services and costs to the Adviser and its affiliates of supplying services pursuant to the management fee agreements, excluding any intra-corporate profit and profit margins of the Adviser and its affiliates from supplying such services. The Board was aware of these considerations and was guided by them in its review of the Fund's advisory contract and subadvisory contract to the extent they are appropriate and relevant, as discussed further below.

The Board considered and weighed these circumstances in light of its substantial accumulated experience in governing the Fund and working with Federated on matters relating to the Federated funds, and was assisted in its deliberations by the advice of independent legal counsel. Throughout the year, the Board has requested and received substantial and detailed information about the Fund and the Federated organization that was in addition to the extensive materials that comprise the Senior Officer's evaluation. Federated provided much of this information at each regular meeting of the Board, and furnished additional reports in connection with the particular meeting at which the Board's formal review of the advisory contract occurred. Between regularly scheduled meetings, the Board has received information on particular matters as the need arose. Thus, the Board's consideration of the advisory contract included review of the Senior Officer's evaluation, accompanying data and additional reports covering such matters as: the Adviser's and subadviser's investment philosophy, revenue, profitability, personnel and processes; investment and operating strategies; the Fund's short- and long-term performance (in absolute terms, both on a gross basis and net of expenses, as well as in relationship to its particular investment program and certain competitor or "peer group" funds and/or other benchmarks, as appropriate), and comments on the reasons for performance; the Fund's investment objectives; the Fund's expenses (including the advisory fee itself and the overall expense structure of the Fund, both in absolute terms and relative to similar and/or competing funds, with due regard for contractual or voluntary expense limitations); the use and allocation of brokerage commissions derived from trading the Fund's portfolio securities (if any); the nature, quality and extent of the advisory and other services provided to the Fund by the Adviser and its affiliates; the preferences and expectations of Fund shareholders and their relative sophistication; the continuing state of competition in the mutual fund industry and market practices; the range of comparable fees for similar funds in the mutual fund industry; the Fund's relationship to the Federated family of funds which include a comprehensive array of funds with different investment objectives, policies and strategies which are available for exchange without the incurrence of additional sales charges; compliance and audit reports concerning the Federated funds and the Federated companies that service them (including communications from regulatory agencies), as well as Federated's responses to any issues raised therein; and relevant developments in the mutual fund industry and how the Federated funds and/or Federated are responding to them. The Board's evaluation process is evolutionary. The criteria considered and the emphasis placed on relevant criteria change in recognition of changing circumstances in the mutual fund marketplace.

With respect to the Fund's performance and expenses in particular, the Board has found the use of comparisons to other mutual funds with comparable investment programs to be particularly useful, given the high degree of competition in the mutual fund business. The Board focused on comparisons with other similar mutual funds more heavily than non-mutual fund products or services because, simply put, they are more relevant. For example, other mutual funds are the products most like the Fund, they are readily available to Fund shareholders as alternative investment vehicles, and they are the type of investment vehicle in fact chosen and maintained by the Fund's investors. The range of their fees and expenses therefore appears to be a generally reliable indication of what consumers have found to be reasonable in the precise marketplace in which the Fund competes. The Fund's ability to deliver competitive performance when compared to its peer group was a useful indicator of how the Adviser is executing the Fund's investment program, which in turn assisted the Board in reaching a conclusion that the nature, extent, and quality of the Adviser's investment management services were such as to warrant continuation of the advisory contract. In this regard, the Senior Officer has reviewed Federated's fees for providing advisory services to products outside the Federated family of funds (e.g., institutional and separate accounts). He concluded that mutual funds and institutional accounts are inherently different products. Those differences included, but are not limited to targeting different investors, being subject to different laws and regulations, different legal structure, distribution costs, average account size and portfolio management techniques made necessary by different cash flows. The Senior Officer did not consider these fee schedules to be significant in determining the appropriateness of mutual fund advisory contracts.

The Senior Officer reviewed reports compiled by Federated, and directed the preparation of independent reports, regarding the performance of, and fees charged by, other mutual funds, noting his view that comparisons to fund peer groups is of significance in judging the reasonableness of proposed fees.

The Fund's performance fell below the median of the relevant peer group for both the one and three year periods ending December 31, 2005. The Board discussed the Fund's performance with the Adviser and recognized the efforts being undertaken by the Adviser. The Board will continue to monitor these efforts and the performance of the Fund.

The Board also received financial information about Federated, including reports on the compensation and benefits Federated derived from its relationships with the Federated funds. These reports covered not only the fees under the advisory contracts, but also fees received by Federated's subsidiaries for providing other services to the Federated funds under separate contracts (e.g., for serving as the Federated funds' administrator). The reports also discussed any indirect benefit Federated may derive from its receipt of research services from brokers who execute Federated fund trades as well as waivers of fees and/or reimbursements of expenses. In order for a fund to be competitive in the marketplace, Federated and its affiliates frequently waived fees and/or reimbursed expenses and have indicated to the Board their intention to do so in the future, where appropriate.

Federated furnished reports, requested by the Senior Officer, that reported revenues on a fund by fund basis and made estimates of the allocation of expenses on a fund by fund basis, using allocation methodologies specified by the Senior Officer. The Senior Officer noted that, although they may apply consistent allocation processes, the inherent difficulties in allocating costs and the lack of consensus on how to allocate those costs causes such allocation reports to be of questionable value. The allocation reports were considered in the analysis by the Board but were determined to be of limited use.

The Board also reviewed profitability information for Federated and other publicly held fund management companies, provided by the Senior Officer, who noted the limited availability of such information, and concluded that Federated's profit margins did not appear to be excessive.

The Senior Officer's evaluation also discussed the notion of possible realization of "economies of scale" as a fund grows larger. The Board considered in this regard that the Adviser has made significant additional investments in the portfolio management and distribution efforts supporting all of the Federated funds and that the benefits of any economies, should they exist, were likely to be enjoyed by the fund complex as a whole. Finally, the Board also noted the absence of any applicable regulatory or industry guidelines on this subject, which is compounded by the lack of any common industry practice or general pattern with respect to structuring fund advisory fees with "breakpoints" that serve to reduce the fee as the fund attains a certain size. The Senior Officer did not recommend institution of breakpoints in pricing Federated's fund advisory services at this time.

During the year ending December 31, 2005, the Fund's investment advisory fee after waivers and expense reimbursements, if any, was above the median of the relevant peer group. The Board reviewed the fees and other expenses of the Fund with the Adviser and was satisfied that the overall expense structure of the Fund remained competitive. The Board will continue to monitor advisory fees and other expenses borne by the Fund.

No changes were recommended to, and no objection was raised to the continuation of the Fund's advisory contract, and the Senior Officer noted that Federated appeared to provide appropriate administrative services to the Fund for the fees paid. For 2005, the Board concluded that the nature, quality and scope of services provided the Fund by the Adviser and its affiliates was satisfactory.

In its decision to continue an existing investment advisory contract, the Board was mindful of the potential disruptions of the Fund's operations and various risks, uncertainties and other effects that could occur as a result of a decision to terminate or not renew an advisory contract. In particular, the Board recognized that most shareholders have invested in the Fund on the strength of the Adviser's industry standing and reputation and in the expectation that the Adviser will have a continuing role in providing advisory services to the Fund. Thus, the Board's approval of the advisory contract reflected the fact that it is the shareholders who have effectively selected the Adviser by virtue of having invested in the Fund.

The Board based its decision to approve the advisory contract on the totality of the circumstances and relevant factors and with a view to past and future long-term considerations. Not all of the factors and considerations identified above were relevant to every Federated fund, nor did the Board consider any one of them to be determinative. With respect to the factors that were relevant, the Board's decision to approve the contract reflects its determination that Federated's performance and actions provided a satisfactory basis to support the decision to continue the existing arrangements.

The Senior Officer also made recommendations relating to the organization and availability of data and verification of processes for purposes of implementing future evaluations which the Adviser has agreed to implement.

Voting Proxies on Fund Portfolio Securities

A description of the policies and procedures that the Fund uses to determine how to vote proxies, if any, relating to securities held in the Fund's portfolio is available, without charge and upon request, by calling 1-800-341-7400. A report on "Form N-PX" of how the Fund voted any such proxies during the most recent 12-month period ended June 30 is available through Federated's website. Go to FederatedInvestors.com, select "Products," select the "Prospectuses and Regulatory Reports" link, then select the Fund to access the link to Form N-PX. This information is also available from the EDGAR database on the SEC's website at www.sec.gov.

Quarterly Portfolio Schedule

The Fund files with the SEC a complete schedule of its portfolio holdings, as of the close of the first and third quarters of its fiscal year, on "Form N-Q." These filings are available on the SEC's website at www.sec.gov and may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. (Call 1-800-SEC-0330 for information on the operation of the Public Reference Room.) You may also access this information from the "Products" section of the Federated's website at FederatedInvestors.com by clicking on "Portfolio Holdings" and selecting the name of the Fund, or by selecting the name of the Fund and clicking on "Portfolio Holdings." You must register on the website the first time you wish to access this information.

Mutual funds are not bank deposits or obligations, are not guaranteed by any bank, and are not insured or guaranteed by the U.S. government, the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other government agency. Investment in mutual funds involves investment risk, including the possible loss of principal.

This report is authorized for distribution to prospective investors only when preceded or accompanied by the fund's prospectus, which contains facts concerning its objective and policies, management fees, expenses, and other information.

IMPORTANT NOTICE ABOUT FUND DOCUMENT DELIVERY

In an effort to reduce costs and avoid duplicate mailings, the Fund(s) intend to deliver a single copy of certain documents to each household in which more than one shareholder of the Fund(s) resides (so-called "householding"), as permitted by applicable rules. The Fund's "householding" program covers its/their Prospectus and Statement of Additional Information, and supplements to each, as well as Semi-Annual and Annual Shareholder Reports and any Proxies or information statements. Shareholders must give their written consent to participate in the "householding" program. The Fund is also permitted to treat a shareholder as having given consent ("implied consent") if (i) shareholders with the same last name, or believed to be members of the same family, reside at the same street address or receive mail at the same post office box, (ii) the Fund gives notice of its intent to "household" at least sixty (60) days before it begins "householding" and (iii) none of the shareholders in the household have notified the Fund(s) or their agent of the desire to "opt out" of "householding." Shareholders who have granted written consent, or have been deemed to have granted implied consent, can revoke that consent and opt out of "householding" at any time: shareholders who purchased shares through an intermediary should contact their representative; other shareholders may call the Fund at 1-800-341-7400.

Federated Securities Corp., Distributor

Cusip 313911109
Cusip 313911208
Cusip 313911307
Cusip 313911406

8080105 (7/06)

Federated is a registered mark of Federated Investors, Inc. 2006 (c)Federated Investors, Inc.



Item 2.     Code of Ethics

            Not Applicable.

Item 3.     Audit Committee Financial Expert

            Not Applicable.

Item 4.     Principal Accountant Fees and Services

            Not Applicable

Item 5.     Audit Committee of Listed Registrants

            Not Applicable

Item 6.     Schedule of Investments

            Not Applicable

Item 7.     Disclosure of Proxy Voting Policies and Procedures for
            Closed-End Management Investment Companies

            Not Applicable

Item 8.     Portfolio Managers of Closed-End Management Investment
            Companies

            Not Applicable

Item 9.     Purchases of Equity Securities by Closed-End Management
            Investment Company and Affiliated Purchasers

            Not Applicable

Item 10.    Submission of Matters to a Vote of Security Holders

            Not Applicable

Item 11.    Controls and Procedures

(a) The registrant's President and Treasurer have concluded that the
registrant's disclosure controls and procedures (as defined in rule 30a-3(c)
under the Act) are effective in design and operation and are sufficient to form
the basis of the certifications required by Rule 30a-(2) under the Act, based on
their evaluation of these disclosure controls and procedures within 90 days of
the filing date of this report on Form N-CSR.

(b) There were no changes in the registrant's internal control over financial
reporting (as defined in rule 30a-3(d) under the Act) during the last fiscal
quarter that have materially affected, or are reasonably likely to materially
affect, the registrant's internal control over financial reporting.

Item 12.    Exhibits













SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

Registrant  Federated Stock and Bond Fund, Inc.

By          /S/ Richard A. Novak
            Richard A. Novak, Principal Financial Officer
                            (insert name and title)

Date        July 25, 2006


Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.


By          /S/ J. Christopher Donahue
            J. Christopher Donahue, Principal Executive Officer


Date        July 25, 2006


By          /S/ Richard A. Novak
            Richard A. Novak, Principal Financial Officer


Date        July 25, 2006

Federated World-Class Investment Manager

Federated Stock and Bond Fund, Inc.

SEMI-ANNUAL SHAREHOLDER REPORT

Class A SharesClass B SharesClass C SharesClass K Shares

Financial Highlights - Class A Shares

Financial Highlights - Class B Shares

Financial Highlights - Class C Shares

Financial Highlights-Class K Shares

Shareholder Expense Example

ACTUAL EXPENSES

HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES

Portfolio of Investments Summary Tables

Portfolio of Investments

Statement of Assets and Liabilities

Statement of Assets and Liabilities-continued

Statement of Operations

Statement of Operations-continued

Statement of Changes in Net Assets

Notes to Financial Statements

1. ORGANIZATION

2. SIGNIFICANT ACCOUNTING POLICIES

Investment Valuation

Repurchase Agreements

Investment Income, Gains and Losses, Expenses and Distributions

Premium and Discount Amortization/Paydown Gains and Losses

Federal Taxes

Other Taxes

When-Issued and Delayed Delivery Transactions

Foreign Currency Translation

Futures Contracts

Restricted Securities

Use of Estimates

Other

3. CAPITAL STOCK

4. FEDERAL TAX INFORMATION

5. INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES

Investment Adviser Fee

Administrative Fee

Distribution Services Fee

Sales Charges

Shareholder Services Fee

Expense Reduction

Other

General

Transactions with Affiliated Companies

6. INVESTMENT TRANSACTIONS

7. LEGAL PROCEEDINGS

Evaluation and Approval of Advisory Contract

FEDERATED STOCK AND BOND FUND, INC. (THE "FUND")

Voting Proxies on Fund Portfolio Securities

Quarterly Portfolio Schedule

IMPORTANT NOTICE ABOUT FUND DOCUMENT DELIVERY

Federated
World-Class Investment Manager

Class A Shares
Class B Shares
Class C Shares
Class K Shares