Preferred stock market retraces losses; ING issues see day's largest gains, puzzling traders

By Andrea Heisinger

New York, Oct. 6 - The preferred stock market saw a slight rebound on Thursday as "almost everything was up," according to a trader.

"The word of the day is 'green,'" he said.

European banks and insurance companies were all up more than domestic names like Bank of America Corp., the source said.

"We're taking back some of the last two days' losses," he said.

It was a low-volume day but an "upside" one, a market source said. "There's not a whole lot of bidding out there - not a whole lot of selling either."

The big players in the preferred market are waiting to see what happens with the euro zone crisis. The market is open on Friday and Monday despite the Columbus Day holiday, but both of those days are expected to be "a waste," the source said.

A trader said that the "market is up big," possibly due to the meeting of European Union officials trying to find a solution to the debt crisis in the euro zone. There was also word from the European Central Bank that it will come to the aid of banks having trouble coming up with short-term funds.

The trader quoted the market up 2.97% for the day, or 75 cents per preferred for $25-par issues.

One name that stood out in the market for the day was ING Groep NV. The company's issues were "across the board showing unusual strength in ones that had liquidity," the trader said.

Otherwise, the top-trading names were banks both domestic and foreign.

ING gains baffle

At least one source was puzzled as to why ING issues were among those making large gains for the day.

ING's 6.125% perpetual debt securities (NYSE: ISG) rose $1.69, or 10.8%, to $17.23 on volume of 70,000 securities.

The company saw 310,000 of its 7.2% perpetual debt securities (NYSE: INZ) trade. They closed $1.94 higher at $19.94, a gain of 10.78%.

ING's 8.5% perpetual hybrid capital securities (NYSE: IGK) closed at $22.94 with a gain of $2.21, or 10.66%, on volume of 456,000 securities.

"They were the biggest percentage gainer - the big story of the day," a trader said.

Bumping up again ING in gains were some preferreds from the Royal Bank of Scotland plc that were up 8.5% to 8.75% overall, the trader said.

Banks top trading

The names seeing the highest trading volume included domestic banks, a source said.

Investors traded 928,000 of Bank of America Corp.'s 8.2% series H depositary shares (NYSE: BACPH), which rose 61 cents, or 2.9%, to close the day at $21.89.

Next up were Ally Financial Inc.'s 8.5% series A preferreds (NYSE: ALLYPA) with volume of 814,000 preferreds. They closed up 64 cents, or 3.7%, at $17.99.

Other names seen trading at high volume included Goldman Sachs Group, Inc. The investment bank saw 535,000 of its series F preferreds (NYSE: GSF) trade. They closed at $24.43 with a gain of 12 cents.

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