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Preferreds fail to recoup losses; Northern Trust’s new deal weak; Citigroup, Ally active
By Stephanie N. Rotondo
Phoenix, Aug. 1 – Preferred stocks remained in retreat on Friday though the market had initially been “flat to slightly up,” according to a trader.
The Wells Fargo Hybrid and Preferred Securities index finished the session down 30 basis points. At mid-morning, the index was up 5 bps but soon started to drift downward.
A disappointing jobs number was at least partially to blame for the weakness. The Labor Department said Friday that 209,000 jobs were added in July, down from the 230,000 expected. However, the report was the sixth straight month that more than 200,000 jobs were added to the marketplace.
Unemployment increased to 6.2%, versus expectations it would hold steady at 6.1%.
As for the primary preferred market, Northern Trust Corp.’s new $400 million of 5.85% series C noncumulative perpetual preferreds were softer on the day, trading in a range of $24.11 to $24.65. Ultimately, the paper ended at $24.40, down 23 cents from Thursday’s close.
A trader saw the issue quoted wide at $24.40 bid, $24.74 offered
The deal priced on Tuesday.
In secondary dealings, a few issues saw some serious trading.
Citigroup Inc.’s 7.875% fixed-to-floating rate trust preferreds (NYSE: CPN) traded down 8 cents at $27.01 with 4.19 million shares changing hands. Ally Financial Inc.’s 8.125% series 2 fixed-to-floating rate trust preferreds (NYSE: ALLYPA) meantime fell 7 cents to $27.11, with about 1.19 million shares trading.
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