Midday Commentary: Preferreds reverse direction, trend higher; Fannie, Freddie continue to climb

By Stephanie N. Rotondo

Phoenix, Nov. 14 - Preferred stocks were attempting to tick up on Thursday after spending the first part of the week on the decline.

At midday, the Wells Fargo Hybrid and Preferred Securities Index was up 4 basis points.

However, a trader said that overall trading was muted aside from a few issues.

In particular, he said that Freddie Mac and Fannie Mae preferreds continued to be active and higher following an announcement late Wednesday from a group of private investors proposing to take the agencies private.

The trader noted that the group is aiming to take only a portion of the company, leaving most of the assets with the federal government.

Freddie's 8.375% fixed-to-floating rate noncumulative perpetual preferreds (OTCBB: FMCKJ) were up 64 cents in early trading at $9.45. Fannie's 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) 41 cents better at $9.26.

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