Syria worries hit preferreds; Citigroup active, steady ahead of redemption; banks decline

By Stephanie N. Rotondo

Phoenix, Sept. 3 - Preferred stocks were "trickling down" on Tuesday as the 30-year Treasury bond was "getting hit so hard."

A trader said Treasuries were taking a beating because of fears related to Syria. He noted that oil prices were "going through the roof," also on concerns regarding how the United States might handle the issue, especially as President Obama indicated he would seek congressional approval for a strike on the country and the Assad regime.

Early in the day, it was reported that John Boehner, speaker of the House, said he would support Obama's call for military action.

But while the preferred market was slipping during the session, activity remained muted aside from a few names. In particular, Citigroup Inc.'s 6.1% trust preferreds (NYSE: CPR) were very busy - over 1.3 million shares traded, with the next active paying security at just about 340,000 shares - but steady at $25.36.

"It's just shuffling to cash buyers," a market source said.

The issue was called last week for redemption on Oct. 1.

Market sells off

While the straight equity market saw modest gains on Tuesday, the preferred stock market was trading off during the first session back from the long three-day weekend.

The Wells Fargo Hybrid and Preferred Securities index was down 46 basis points, or about 11.5 cents on average for $25-par paper.

Volume was "very light," a source commented, but of the most liquidly traded issues, all were down in line with the market.

JPMorgan Chase & Co.'s 5.5% series O noncumulative preferreds (NYSE: JPMPD) fell 17 cents to $22.20, while Wells Fargo & Co.'s 5.85% series Q fixed-to-floating-rate noncumulative perpetual preferreds (NYSE: WFCPQ) dipped 9 cents to $24.07. US Bancorp's 6.5% series F fixed-to-floating-rate noncumulative perpetual preferreds (NYSE: USBPM) lost 35 cents, or 1.34%, to end at $25.81.

Away from financial names, Public Storage's 5.625% series U cumulative preferreds (NYSE: PSAPU) declined 13 cents to $21.54.

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