Midday Commentary: Preferreds rally after debt-ceiling deal; Goldman firms despite revenue miss

By Stephanie N. Rotondo

Phoenix, Oct. 17 - A preferred stock trader said that "everything is up in the secondary market" as investors reacted to the U.S. government's last-minute deal to reopen and avoid hitting the debt ceiling.

He estimated that most securities were up 20 to 25 cents.

According to the Wells Fargo Hybrid and Preferred Securities index, the market was up 42 basis points at midday, or 10.5 cents on average for $25-par paper.

However, there continued to be "no talk of any new deals."

"Maybe we'll see some next week now that everything has calmed down," he said.

Goldman Sachs & Co. reported earnings early in the day. Despite a 20% decline in revenues - the largest thus far on Wall Street - the investment bank's preferreds were rising.

The 5.95% series I noncumulative preferreds (NYSE: GSPI) moved up 8 cents as of midday to $22.72, as the floating-rate series D noncumulative preferreds (NYSE: GSPD) increased about 9 cents to $20.35.

The 5.5% series J fixed-to-floating rate noncumulative preferreds (NYSE: GSPJ) were up the most, rising 21 cents to $22.95.

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