Morning Commentary: Market sees more strength in early trading; Morgan Stanley, GE profits beat

By Stephanie N. Rotondo

Phoenix, Oct. 17 – Preferred stocks continued to recover in early Friday trading, helped out by a round of decent earnings.

The Wells Fargo Hybrid and Preferred Securities index was up 16 basis points at mid-morning.

A trader said that investors were coming to realize that the week’s selloff was “a little overdone.” As such, “People are looking to get their feet back into the high-yield market.”

Morgan Stanley & Co. Inc. and General Electric Co. put out earnings on Friday, with both showing a profit that beat expectations. In Morgan Stanley’s preferred issues, most of the paper was heading higher, though the most actively traded issue – the 6.375% series I fixed-to-floating rate noncumulative preferreds (NYSE: MSPI) – was unchanged at $25.19.

The 6.45% capital securities (NYSE: MSK) were up 7 cents at $25.20.

In GE paper, the 4.875% $25-par notes due 2052(NYSE: GEB) put on 8 cents early in trading to $24.40, while the 4.7% $25-par notes due 2053 (NYSE: GEK) earned 6 cents to $23.41.

Away from earnings news, Ally Financial Inc. declared a dividend on its 8.5% series A fixed-to-floating rate perpetual preferreds (NYSE: ALLYPB) on Friday.

The preferreds were quite active following the announcement, rising 8 cents to $26.99.

The 53-cents-per-share dividend will be paid on Nov. 17.

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