Energy tanks with lower oil; Chesapeake extends losses; Priceline, salesforce.com move up

By Rebecca Melvin

New York, Feb. 9 – Another drop in crude oil prices on Tuesday led stocks and convertibles in the energy sector lower again, with Chesapeake Energy Corp. leading losses after a precipitous drop on Monday.

“We were pretty active in Chesapeake,” a New York-based trader said about Tuesday’s session.

The Chesapeake 2.5% convertibles dropped another 4 points and the Chesapeake 2.25% convertibles were down about 1.5 points, a second New York-based trader said. The Chesapeake 2.5% convertibles had lost more than 50% of their value on Monday.

The convertibles of other energy names that were lower included those of Whiting Petroleum Corp., Cobalt International Energy Inc. and Cheniere Energy Inc., although the underlying stock of Cheniere was notable in that it was positive on Tuesday. Southwestern Energy Co.’s mandatories were also lower on an outright basis but largely unchanged on a dollar-neutral basis, a trader said.

Elsewhere, some convertibles traded a little bit higher on an outright basis in line their underlying shares as market players sought shorter-dated, better-quality credits in light of uncertainty and volatility that have weakened equity markets.

Priceline Group Inc.’s 1% convertibles were up by more than a point on an outright basis to 120.5, according to Trace data, with shares of the Norwalk, Conn.-based travel site up about $17.00, or 1.8%.

Salesforce.com Inc. saw its convertibles higher with its stock up 6.6% after a rating upgrade by Jefferies to “hold” from “underperform.”

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