Preferreds rise despite weak jobs data; Ally falls, recovers; Reinsurance Group edges up

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 the first part of next week.

The Wells Fargo Hybrid and Preferred Securities index was up 37 basis points at mid-morning. It backed off a little, according to a market source, but then recovered to close up 31 bps.

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.

By the close, the issue was unchanged at $27.24.

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 (OTCBB: ALFI) on that date.

Reinsurance Group gains

Reinsurance Group of America Inc.'s 6.2% fixed-to-floating rate subordinated debentures due 2042 (NYSE: RZA) have been actively trading for the past few sessions, a source said, though he was not sure what was prompting the activity.

The issue moved up 7 cents on Friday, ending at $25.27.

The source noted that Zack's had lifted the common stock to an "outperform" rating, but he didn't think that was driving the preferreds.

The reinsurance company is based in St. Louis.

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