Market up, then weakens amid holiday slowdown; Morgan Stanley, Goldman, BB&T post earnings

By Stephanie N. Rotondo

Phoenix, April 17 - Preferred stocks continued to inch higher in Thursday trading, but one trader said that the day was "over" by mid-morning due to the holiday.

The markets are closed Friday for Good Friday.

The Wells Fargo Hybrid and Preferred Securities index was up 4 basis points as of midday but dropped into negative territory by the end of the day, closing off 48 bps.

"We should have some fun next week," the trader opined, expecting that the new issue pipeline would start to flow.

More earnings were out Thursday, with Morgan Stanley & Co. Inc. and Goldman Sachs & Co. coming in ahead of estimates and BB&T Corp. seeing a rise in profit but missing expectations.

Morgan Stanley preferreds were on the softer side after its earnings release. The floating-rate series A noncumulative preferreds (NYSE: MSPA) dipped a penny to $20.42 in early trading, ending down 6 cents at $20.37.

The 7.125% series E fixed-to-floating rate noncumulative preferreds (NYSE: MSPF) lost 12 cents - in line with the market trend - to close at $26.26.

Goldman was mixed early in the day but managed to finish the session with a mostly firm tone.

The 5.5% series J fixed-to-floating rate noncumulative preferreds (NYSE: GSPJ) fell a penny to $24.02 at midday, ending down 23 cents at $23.80. But the 6.2% series B noncumulative preferreds (NYSE: GSPB) rose 20 cents to $24.95 and the 5.95% series I noncumulative preferreds (NYSE: GSPI) gained 8 cents to $23.50.

As for BB&T, its preferred shares were mixed, with the 5.625% series E noncumulative perpetual preferreds (NYSE: BBTPE) initially putting on 2 cents to trade at $22.68, then falling 4 cents to $22.26.

The 5.85% series D noncumulative perpetual preferreds (NYSE: BBTPD) moved up 2 cents to $23.89.

Morgan Stanley reported a 55% gain in profit for the first quarter, reporting net income of $1.45 billion, or 74 cents per share. Once adjusted for certain items, the profit was 68 cents per share.

That compared to income of $936 million, or 48 cents per share, the year before.

Fixed income trading and sales saw a 13% increase at $1.7 billion. Total revenues were $8.93 billion, a 10% gain year over year.

On an adjusted basis, analysts polled by Thomson Reuters were expecting a 59-cent-per-share profit on revenues of $8.52 billon.

As for Goldman, its profit fell 11% to $1.95 billion, or $4.02 per share. Revenue was off 8% at $9.33 billion.

Despite the slide, the numbers still beat expectations of earnings of $3.45 per share on revenues of $8.7 billion.

As for BB&T, its first-quarter income rose to $501 million, or 69 cents per share, from $210 million, or 29 cents per share, the year before.

Revenue was down 6.7% at $2.3 billion. The decline was attributed in part to a dip in mortgage banking income.

Despite the increased profit, the earnings barely missed analysts' expectations of earnings of 70 cents per share on revenue of $2.31 billion.

Away from earnings, RAIT Financial Trust's $60 million of 7.625% $25-par notes due 2024 were admitted for trading on the New York Stock Exchange on Thursday.

The ticker symbol is "RFT." The deal priced April 7.

The notes were trading at $24.85 at midday, versus opening levels of $24.99. At the close, the issue was trading at $24.80.

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