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Midday Commentary: Preferreds gain strength despite weak jobs data; Ally active but lower
By Stephanie N. Rotondo
Phoenix, Jan. 10 - Preferred stocks continued to post gains Friday as investors searched for yield.
New unemployment numbers were not good, a trader noted, leaving investors to wonder if "the economy is not as strong as they thought it was."
"People are realizing we may have these low yields for longer than anticipated," he said. As such, they were looking to preferreds.
Given that, the trader also expected that a new deal could come during the first part of next week.
The Wells Fargo Hybrid and Preferred Securities index was up 37 basis points at mid-morning.
Ally Financial Inc.'s 8.5% series A fixed-to-floating rate cumulative perpetual preferreds (NYSE: ALLYPB) were on the active side early in the session but were down 3 cents at $27.21.
On Wednesday, the Detroit-based bank announced it had declared a quarterly dividend on the series A paper. The dividend will equal 53 cents per share and will be paid out on Feb. 18.
The company is also paying an $18.06 per share dividend on its 7% series G fixed-rate cumulative perpetual preferreds (OYCBB: ALFI) on that date.
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