Midday Commentary: Preferred arena weak in early trading; Wells Fargo's new issue admitted to NYSE

By Stephanie N. Rotondo

Phoenix, Dec. 19 - Preferred stocks were soft in early Thursday trading, even as one trader speculated that the market was a good place to look for yield.

"[Based on] spreads versus corporates, preferreds are getting cheaper," he said. He noted that Merrill Lynch put out a report in October that said spreads were 75 basis points above the average in the last couple of years, and he speculated that they had even widened out more since the report was released.

Still, trading was on the quiet side, likely due to the upcoming holidays, not to mention it being the end of the year.

As of mid-morning, the Wells Fargo Hybrid and Preferred Securities index was off 19 basis points.

In a quick turnaround, Wells Fargo & Co.'s $750 million of 6.625% series R class A fixed-to-floating rate noncumulative preferreds listed on the New York Stock Exchange on Thursday.

The deal priced Dec. 11. The ticker symbol is "WFCPR."

Paper was trading at $25.15 early in the day after opening at $25.20 and rising as high as $25.24. Despite the low-tick, a trader said the issue had "moved up nicely."

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