Tech sags after Microchip sales warning; energy names weaken further; new Anacor quiet

By Rebecca Melvin

New York, Oct. 10 – Convertibles were under pressure again on Friday, with some technology names joining those of the energy sector in a selloff, as equities slid, ending the session near their lows. The Nasdaq Stock market fell 2% on Friday and 4% for the week.

Microchip Technology Inc.’s shares and convertibles tumbled after the Chandler, Ariz.-based semiconductor maker warned revenue for its fiscal second quarter will be weaker than expected and asserted that an industry-wide correction has begun.

The warning pulled down chip names. Intel Corp.’s convertibles traded actively at pricing that was lower in line with shares that fell nearly 5%.

Elsewhere, the Priceline Group Inc. was also a notable loser.

But energy names, which began to drop earlier in the week, extended losses on Friday, with the bloodshed in that sector deemed more significant than that in tech, sources agreed.

Cobalt International Energy Inc. extended losses for a fifth straight day, and Energy XXI (Bermuda) Ltd. has tumbled hard for three sessions. Coal names including Alpha Natural Resources Inc. and Peabody Energy Corp. also remained weak.

In the primary market, Anacor Pharmaceuticals Inc.’s newly priced 2% convertibles were quiet Friday after the Palo Alto, Calif.-based biopharmaceutical company priced a slightly upsized $75 million of the seven-year senior notes through the rich end of coupon talk and at the rich end of premium talk.

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