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Email Version, Section 1, Sunday 05/20/2001
The SplitTrader.com Newsletter         Sunday 05/20/2001 1 of 2
Copyright 2001, All rights reserved.
Redistribution in any form is strictly prohibited.

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In This Newsletter:
===================

Market Stats
Market Commentary - Three In A Row
Definition of the Day
Friday's Split Announcements - KKD
Monday's Expirations
Event Calendar - Next Week's Economic reports
Upcoming Splits for next two weeks
Successful Announcements - Last Week
New Candidates List
Expected/Likely Announcements for the Coming Week

================================================================


Market Stats For the Week
=========================

Index                     Close    Change    Support   Resistance

DJIA (INDU)           11,301.74   +480.43     11,000       11,450
Nasdaq (COMPX)         2,198.88   + 91.52      1,850        2,250
S&P 500 (SPX)          1,291.96   + 46.31      1,265        1,300
Russell 2000 (RUT)       506.80   + 19.44        485          515
PHLX Semi (SOX)          657.43   + 40.65        575          725



Market Commentary
=================

Three In A Row

After hitting the equivalent of a homerun on Wednesday, the
market followed up with two well-earned base hits to end the week
on a positive note.  The homerun was thanks to a slow, belt-high
creampuff of a pitch served up by the Fed on Tuesday in the form
of a 50-basis point interest rate cut.  Although it took the
market until Wednesday to take a whack at the pitch, it knocked
the cover off the ball, with the Dow (INDU) rising 342.95 and the
NASDAQ (COMPX) adding 80.86.

While Wednesday's standing-ovation worthy performance was
impressive to say the least, it was how the market finished the
week that will have investors emptying out their money markets by
this Monday's close.  The simple fact that the market would just
not go down after Wednesday's run was proof that there is
something fundamentally different going on this time around.

Believe me when I say that there were plenty of big players in
the market on Thursday and Friday trying their damnedest to put
the train back in the station so that they might purchase a
ticket to this next leg higher.  But, as evidenced by all the
buying we saw on every intraday pullback, the market now has all
the determination of that runaway train that cruised through Ohio
cities and farms for nearly 70-miles on Wednesday without anyone
at the helm.  Just like the engineer that jumped onto the hell-
bent runaway train while it was still moving, investors are just
going to have to get a running start and take the plunge if they
want to participate in this next bull market.

More evidence to support that we are indeed at the dawn of a new
bull market came in the week's revival of IPO activity.  Three
successful initial public offerings hit the market and promptly
proceeded to rise (just like in the good ol' days).

Newly offered shares of Instinet (NASDAQ:INET), the Reuters
electronic stock trading system, were priced at $14.50 and rose
$3.15 to $17.65 right out of the gate.  Joining INET on the
NASDAQ were shares of optical switch maker Tellium (NASDAQ:TELM),
which promptly added 40%, to close at $21.80.  Meanwhile, over on
the big board, shares of gas turbine equipment maker Global Power
(NYSE:GEG) plowed ahead $11.45, or 57%, to $31.45 on its first
day of trading.

Finally, if the market was going to succumb to its old ways, it
would have done so on Thursday and Friday, as poor profit reports
from Dell Computer (NASDAQ:DELL) and Agilent Technologies
(NYSE:A) and a profit warning from Palm (NASDAQ:PALM) gave it
every reason to head south.  Instead, investors chose to focus
upon an improving economy and shrugged off the bad news.  If this
trend holds up, then the upcoming earnings warning season might
not pose the threat that most market mavens are anticipating.

Friday's Markets

While it appeared at first as if the averages wanted to simply
drift lower into the weekend and take a well-deserved respite,
last minute buyers came in to lift both the Dow and the NASDAQ
into the black.  Remember not too long ago when the markets sold
off on just about every Friday because folks were too skittish to
hold stock over the weekend?  Well nowadays it seems buyers want
to get in on Fridays to get jump on the following week's trend.

Evidence of this showed up in the fact that the NASDAQ rose 20-
points in the last hour on Friday to close up 5.20 for the day.
The tech heavy index rose 91.45 or 4.3% for the week.  Volume
came in on the light side at 1.7 billion on Friday, as many
traders started their weekend early.

The Dow also finished the week out with a bang, closing higher by
53.16, to 11,301.74.  For the week, the old-economy average added
480.43, or 4.4%.  The Dow is being powered by stocks like General
Electric (NYSE:GE), which is finding its stride after breaking
out of a cup and handle formation on Wednesday.  GE closed up
$0.88 to $52.99 on Friday.

The broader market, as measured by the S&P 500 (SPX.X) also
continues to roll higher.  The SPX close up 3.47 to 1291.96 on
Friday and will most likely test resistance again at 1300.  If it
clears 1300, resistance does not show up again until the 1335
level.

Turning to the treasurys market, the long-end of the curve
continues to outperform the short-end.  The 10-year note added
1/32 to yield 5.41% and the 30-year bond rose 3/32 to yield
5.765%.

We did get some economic data in on Friday in the form of the
U.S. trade deficit.  The deficit rose by a greater than expected
$4.3 billion to $31.2 billion in March.  Economists had widely
expected the gap to widen to $29.2 billion.  The larger than
expected deficit was driven by a 2.9% rise in imports and a 1%
slip in exports.  The result of this higher than expected trade
deficit will be a downward revision of the previously announced
2% GDP figure.  Economists expect the GDP to be revised down to
1.4% this coming Friday.

The recent trend in foreign trade has been slower domestic
imports due to weak consumer demand, but even slower export
activity due to a global slowdown and a strong dollar.
Economists expect this trend to worsen as Europe starts to fell
the effects of the global situation.

Stocks and Sectors on the Move

No other stock typified the mood felt up and down Wall Street
this week than Krispy Kreme (NYSE:KKD), formerly (NADASQ:KREM).
The stock started the week on the NASDAQ at $49 and ended the
week on the big board at $63.85, a 30% move.

This sweet move by the purveyor of the world-renowned glazed
doughnuts came amid a hyped-up move from the NASDAQ to the NYSE,
in which the company set up a conveyor belt on Broad Street to
distribute 40,000 of the fatty treats to both floor brokers
passers by alike.  As if the move to the big board was not
enough, the Winston-Salem based company also declared a 2:1 stock
split after just splitting its shares in March.  I have tried the
devilishly good treats favored by two out of three police
officers nationwide, and I just don't get the fixation.  If you
want further proof that the bull market is back, some kind soul
bought KKD at a p/e of 104.16 on Friday!

In other specific stock news, shares of The Gap (NYSE:GPS) fell
$0.95 to $33.95 on Friday after reporting first-quarter profits
of $0.13/share.  This came in a penny ahead of analysts'
estimates, but The Gap reiterated that it doesn't see the trend
of negative same store comparable numbers reversing until the end
of the year at the earliest.

While some of the larger companies like the Gap will need time
before the full effects of the rate cuts effect their bottom
lines, many of the mid-sized companies (mid-caps) are already
racing ahead on anticipation of an improved corporate outlook.
As compared to the S&P 500, the S&P 400 (the mid-cap index) has
been performing relatively better since the April low.  In
addition, it has recently bounced 2.7% higher from its
consolidation base while the S&P 500 has only bounced 1.5%
higher.

The S&P 400 type stocks might be a good place to focus your
attention in the near term.  It is obvious that the institutions
are betting that they will outperform the big-caps, as evidenced
by their two month run.  A complete list of the 400 stocks that
make up the S&P 400 can be found on the AMEX website by
referencing the S&P 400 ishares.  In addition, an easier way to
play this segment of the market is to purchase the mid cap SPDRS,
or the MDY.  It trades as a stock but tracks the S&P 400.

From the Splittrader split candidates list, the following stocks
are also included in the S&P 400: ACF, ASD, BKH, MKC, MDU and
NNS.

Chart of the S&P 400 MidCap Index:



Also outperforming the broader market last week were shares of
natural gas, oil, oil service, electric and nuclear power stocks.
All of these sectors received a boost from President Bush's
energy plan that was presented to the public in St. Paul,
Minnesota on Thursday.

Although Bush has tried to mix both conservation goals with
exploration and production goals, the main theme of his plan is
clear; to expand the power infrastructure and to become less
reliant on outside (read Iraqi) sources of fuel.  To accomplish
these goals Bush has proposed developing thousands of new power
plants, opening up Alaska to drilling, increasing gas exploration
in the Rockies and bring more nuclear power plant online.

If you have been paying attention to what's going on in the
energy sector, you know that these stocks just won't quit.  They
have been rising on increasing gas and oil prices and on the hype
that the Bush plan has been creating.  Now that the plan is out
in the open, many of these energy plays might have all the fluff
built into them already, but bottom line is that they probably
will make good long-term investments.

In the power plant area look at: Calpine (NYSE:CPN), Dynegy
(NYSE:DYN), NRG Corp. (NYSE:NRG) and Reliant Energy (NYSE:REI).
In the nuclear power area look at: Exelon (NYSE:EXC) and Entergy
(NYSE:ETR).  In the oil drilling area look at: Halliburton
(NYSE:HAL), Schlumberger (NYSE:SLB)and Lone Star (NYSE:LSS).  In
the natural gas area look at: HS Resources (NYSE:HSE), Devon
Energy (NYSE:DVN), Patina Oil & Gas (NYSE:POG) and Apache
(NYSE:APA).

Looking Forward, Always Forward

Looking at the Dow and S&P 500, we have already breached
resistance levels and are in the clear technically speaking.
Therefore, we will be watching the NASDAQ next week to see if it
can muster enough strength to hurdle minor resistance at 2232 and
then more significant resistance at 2250.  While we don't need
the NASDAQ along for the ride in order for the market to be
healthy, it will become a sticking point psychologically speaking
if the other markets leave the NASDAQ behind.

Chart of the NASDAQ Composite:



Next week also brings with it the release of oil and gas
inventories on Wednesday, which might effect those energy stocks
that we were talking about.  In addition, we have the ever-
present initial jobless claims on Thursday and home sales and
durable goods orders on Friday.  Also, Greenspan is due to
address the Economic Club of New York on Thursday, so traders
will certainly have at least one ear bent in the Fed Chairman's
direction listening for more clues as to what the Fed's next move
might be.

So next week becomes another pivotal piece of the puzzle for
those bullish on the market (including myself, if you couldn't
tell).  We will be watching for traders to continue to shrug off
bad corporate news and for the averages and individual stocks to
stay above their consolidation bases.  We would like to see the
NASDAQ end the week on the sunny side of 2550 but will be equally
encouraged if the tech heavy index can trade sideways.

It has become a stock pickers market again, so pick your battles
wisely.  Traders are more than ever focusing in on value, so
watch out for those extended stocks.  If you have some gains,
think about ratcheting up some stops and don't be afraid to pull
the trigger on trades that "feel right" because stocks are acting
rationally again.

Enjoy Your Weekend

Craig Seidler
Assistant Editor
www.SplitTrader.com





Definition of the Day
=====================

Industrial Production

A monthly statistic released by the Federal Reserve Board on the
total output of all U.S. factories and mines.

For the complete definition, please go to:
http://www.splittrader.com/glossary/viewglossary.asp?glossaryid=431



============================
Friday's Split Announcements
============================

Friday, May 18, 2001, Before the Bell

Krispy Kreme fuels the doughnut frenzy

Prior to the opening bell, Krispy Kreme Doughnuts Inc. (NYSE:KKD)
announced that the company will split its common shares on a 2-
for-1 basis. The payable date is slated for June 14.

For the complete announcement, please go to:
http://www.splittrader.com/announcements/051801_1.asp



====================================
Monday's Expirations by Payable Date
====================================

Cleco Corp (CNL) splits 2:1



==============
Event Calendar
==============

For the week of May 21st, 2001

Monday
======
SEMI Book-to-Bill Ratio   Apr  Forecast:    NA   Previous:    NA


Tuesday
=======
None Scheduled


Wednesday
=========
Oil & Gas Inventory    18-May  Forecast:    NA   Previous: 321.2MB
MBA Mortage App Survey 18-May  Forecast:    NA   Previous: 560.4


Thursday
========
Initial Claims         19-May  Forecast:    NA   Previous:   380K
New Home Sales            Apr  Forecast:   984K  Previous:  1021K


Friday
======
Durable Orders            Apr  Forecast: -2.00%  Previous:  3.50%
GDP-Prel.                  Q1  Forecast:  1.90%  Previous:  2.00%
Chain Deflator-Prel.       Q1  Forecast:  3.20%  Previous:  3.20%
Existing Home Sales       Apr  Forecast: 5.270M  Previous: 5.440M
ECRI Wkly Leading Idx  18-May  Forecast:    NA   Previous: 123.40%


Week of May 28th
=================
May 29  Personal Income
May 29  PCE
May 29  Consumer Confidence
May 31  Initial Claims
May 31  Chicago PMI
May 31  Help-Wanted Index
Jun 01  Auto Sales
Jun 01  Truck Sales
Jun 01  Nonfarm Payrolls
Jun 01  Unemployment Rate
Jun 01  Hourly Earnings
Jun 01  Average Workweek
Jun 01  Construction Spending
Jun 01  NAPM Index





===============
Upcoming Splits
===============

Symbol  Company Name                Splits  Payable    Executable

IVX  - IVAX Corporation               5:4  05/18/2001  05/21/2001
CNL  - Cleco Corp.                    2:1  05/21/2001  05/22/2001
STT  - State Street Corp.             2:1  05/30/2001  05/31/2001
BAX  - Baxter International           2:1  05/30/2001  05/31/2001
DGX  - Quest Diagnostics              2:1  05/30/2001  05/31/2001
HTLD - Heartland Express              5:4  05/31/2001  06/01/2001
BJ   - BJ Services                    2:1  05/31/2001  06/01/2001
PKI  - PerkinElmer                    2:1  06/01/2001  06/04/2001
UHS  - Universal Health Services      2:1  06/01/2001  06/04/2001
KNGT - Knight Transportation          3:2  06/01/2001  06/04/2001
CRTQ - Cortech                        2:1  06/01/2001  06/04/2001
FIC  - Fair, Isaac & Co.              3:2  06/04/2001  06/05/2001
COLM - Columbia Sportswear            3:2  06/04/2001  06/05/2001
WFMI - Whole Foods Market             2:1  06/04/2001  06/05/2001
XTO  - Cross Timbers                  3:2  06/05/2001  06/06/2001
EQT  - Equitable Resources            2:1  06/11/2001  06/12/2001
OKE  - ONEOK                          2:1  06/11/2001  06/12/2001
APPB - Applebee's                     3:2  06/12/2001  06/13/2001
JNJ  - Johnson & Johnson              2:1  06/12/2001  06/13/2001
KKD  - Krispy Kreme Doughnuts         2:1  06/14/2001  06/15/2001
GNWR - Genesee & Wyoming              3:2  06/15/2001  06/18/2001
IBOC - Int'l. Bancorp                 5:4  06/15/2001  06/18/2001
EGBN - Eagle Bancorp                  7:5  06/15/2001  06/18/2001
SDS  - SunGard Data Systems           2:1  06/18/2001  06/19/2001



=====================================================
Successful Announcement Predictions For The Past Week
=====================================================

Symbol         Company                Date Announced
=====================================================

SDS            SunGard Data Systems       05/14
TRH            Transatlantic Holdings     05/17



================================
NEW SPLIT CANDIDATES LIST
================================

New Split Candidates:

CIMA - Cima Labs, Inc. $75.00 (+9.00)
This biotech stock has never split its shares, but is now trading
around historic split-levels for the biotech sector.  It doesn't
have enough authorized shares for a 2:1, but it could go ahead
with a 3:2 at this point.  They just announced earnings on May 3,
so we will keep an eye out for a BoD meeting as far as a catalyst
for a split announcement.

 

===

FLR - Flour Corporation $58.50 (+4.74)
Flour has never split its shares, but is now knocking on the $60
level.  The provider of engineering and construction services has
been making new highs on a weekly basis.  We are looking towards
the firm's next unofficial earnings release date of 7/31 as the
next likely time for a 2:1 split announcement.

 

===

HTN - Houghton Mufflin $53.88 (+1.49)
The publisher of those $200 textbooks that you had to buy in
college last split its shares 2:1 in 1997 at around $60.
Recently the stock has hit new highs and now trades just below
$55.  We believe that the publisher could award shareholders with
another 2:1 split at their next earnings release date in mid
July.

 

===

SLOT - Anchor Gaming $64.50 (+6.61)
Investors that have stuck with this slot machine maker have hit
the jackpot.  Even though SLOT just announced a 2:1 split in
September of 2000, shares have moved right back into split
territory.  The stock has just broken out to new highs, so
shareholders might see $70 soon.  If SLOT can hold these lofty
levels, we think it could split 2:1 again in July.

 



==================================================
Expected/Likely Announcements for the Coming Week
==================================================

                                       Date Expected
Symbol         Company                 To Announce

SRDX           SurModics, Inc.            05/21
BJ             BJ's Wholesale Club        05/22
OMC            Omnicom Group, Inc.        05/22
SII            Smith International        05/22
FISV           Fiserv, Inc.               05/23
LOW            Lowes Companies            05/25

----------------------------------------------------

SRDX - SurModics, Inc. $51.00 (-0.15)

SRDX last announced a 2:1 split back in November of 2000 at $48.63.
Given the chemical maker's recent burst into the high $40's, we feel
another announcement could come with the company's BoD meeting
scheduled for 5/21.  The firm has 45 million shares authorized and only
16 million outstanding, so another 2:1 doesn't require a vote for more
shares.

 

===

BJ - BJ's Wholesale Club $43.85 (-0.02)

BJ's has been slip sliding away over the last two months.  Nonetheless,
it still remains in historical split territory.  The company last
announced a 2:1 split in February of 1999 at $43.31.  BJ's has plenty
of authorized shares, so we see a possible split announcement coming
out of the wholesaler's earnings release date of 5/22.

 

===

OMC - Omnicom Group, Inc. $93.85 (+4.10)

OMC last announced a 2:1 split in September of 1997 at $70.50.  Given
that the stock now trades at over $90/share, we feel a 2:1 split
announcement is likely.  We are targeting the firm's BoD meeting on
5/22 as the probable trigger for the announcement.

 

===

SII - Smith International $83.09 (+7.14)

This oilrig equipment provider has not split its shares since 1980.  At
the time SII was trading around $80.  We have a sneaking feeling that
SII is about to announce another split due to the fact that it has a
meeting scheduled for 5/22 to increase its authorized shares from 60
million to 150 million.

 

===

FISV - Fiserv, Inc. $54.07 (+1.87)

FISV has a long history of 3:2 stock splits at the $50-$60 level.
Since FISV now trades in the mid $50's, it becomes a natural for
another split announcement.  We are looking towards the company's next
BoD meeting on 5/23 as the probable trigger for this announcement.

 

===

LOW - Lowes Companies $68.40 (+4.19)

Lowes last announced a 2:1 split in May of 1998 at $79.  However,
the company has also split its shares at $64.00 in 1994 so Lowes
now lies right between these historical split- levels.  Since the
company has a BoD meeting on 5/25, we feel it may ask the
shareholders to authorize more shares and to approve another 2:1
stock split.

 





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