Volume low on Friday heading into holiday; CommonWealth deal, financial names top trading

By Andrea Heisinger

New York, Aug. 31 - Sources had predicted a dismally light day on both the primary and secondary sides of the preferred stock market, and that was what happened on Friday.

There was such light activity in preferreds that many people headed out for the long weekend soon after midday, sources said.

One source commented that there was "one issue with a lot of volume on it, and we're all wondering why."

That issue was a 7.25% series E preferred (NYSE: CWHPE) from CommonWealth REIT. It was trading off 16 cents at $26.48 at around 12 p.m. ET, a trader said, and volume was 837,822 preferreds.

"We thought maybe it was getting called, but there was no reason it should be going down so much," he said, adding that it was seeing "a very limited number of trades."

The rest of the top-traded deals of the day came from financial names.

"Those that were wider, they didn't have bad volume," the trader said.

New issues had been flowing into the preferred market at a rate of a deal a day up until this week, and it will likely take another week for that trend to resume, a market source said.

A second trader, when reached at midday, said that there was "absolutely nothing happening."

"It was the first week in a while where there were no deals, but it was probably a good thing," he said. "[The market] needed to breathe."

There is the possibility of some sales late in the coming week, but since it's a short week "there won't be anything major," the second trader said.

Financials see most volume

Other than the CommonWealth REIT preferreds, the rest of the most-actives list was made up of financial names, a trader said.

Coming in behind the CommonWealth deal was a recent one from JPMorgan Chase & Co. The 5.5% preferreds rose 4 cents to $25.03 on volume of 186,000 preferreds.

Next up were Wells Fargo & Co.'s series N preferreds, which had 180,000 shares trading. A trader saw them at par of $25.00, up 1 cent.

A series G issue from Royal Bank of Scotland Group plc saw 166,000 shares trade. They were quoted at $16.74, or up 16 cents.

Coming in as the fifth most active issue were BB&T Corp.'s series E preferreds. There were 134,000 shares traded, and they were seen off 2 cents at $25.35.

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