Morning Commentary: Priceline, Newmont atop Trace tape as rout in broader markets accelerates

By Rebecca Melvin

New York, Feb. 11 – U.S. convertibles players were focused on protective trades early Thursday as fear gripped global markets regarding vulnerabilities opened up by the collapse in crude oil and lower global growth.

“I think the focus at the institutional level is to not get their eyes ripped out by the market,” a New York-based trader said regarding convertibles players.

Early Thursday, Priceline Group Inc., Newmont Mining Corp. and Intel Corp. were the most actively traded names. Meanwhile the convertibles of Twitter Inc., which reported quarterly results late Wednesday that sent the common shares lower, were mostly quiet, with a trade at 79, which was down from 80 in the Twitter 1% convertible due 2021, according to Trace data.

Priceline’s 0.9% convertibles due 2021 were little changed at 96.

“There is lots of shock and awe at their marks, the trader said regarding convertibles players.

In the broader markets, equities and bond yields plunged. The yield on the benchmark 10-year U.S. Treasury moved down to 1.6%. The S&P 500 stock market was down 38.61 points, or 2%, to 1,813.25 at late morning. Gold was up 4.6% at $1,250 per ounce and among currencies, the safe-haven Japanese yen was higher.

Meanwhile, West Texas Intermediate crude oil continued to hemorrhage, trading last down $1.02, or 4%, to $26.43 a barrel.

The wave of selling started overnight. European stock indices were left sharply lower, led by lower bank stocks. Also in Europe, the Swedish central bank cut its rates further into negative territory.

In the convert space, issuer FireEye Inc. was set to report earnings after the market close. The FireEye shares were lower in the early going, following a bounce on Wednesday after a stock upgrade to “buy” from “neutral” by BTIG Research.

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