Midday Commentary: Preferreds steady as week winds down; Fannie, Freddie slide lower

By Stephanie N. Rotondo

Phoenix, April 4 - Preferred stocks were just slightly better in early Friday trading.

The Wells Fargo Hybrid and Preferred Securities index was up 1 basis point as of mid-morning.

A trader said the Bureau of Labor Statistics' new jobs numbers were helping out. According to the report, 192,000 jobs were added in March and the unemployment rate held steady at 6.7%.

Fannie Mae and Freddie Mac preferreds were again becoming topical as the agencies' former regulator, James Lockhart, opined that the securities were "worthless" in an interview with Reuters.

That didn't bode well for the preferred shares, as Freddie's paper (OTCBB: FMCKJ) dropped 15 cents, or 1.39%, to $10.65 and Fannie's securities (OTCBB: FNMAS) dipped 7 cents to $10.23.

But a trader noted that another news graphic was circulating that showed how much the GSEs had paid back to the government post-bailout - and how based on that amount, the firms could have paid off at least 80% of the principal amount of their outstanding preferreds.

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