Toys ‘R’ Us weakens; AMD retreats on CEO exit; more pain for coal; Fannie, Freddie gain

By Stephanie N. Rotondo

Phoenix, Oct. 10 – Distressed debt ended the week soft yet again, as investors continued to worry about a slowing global economy and looming interest rate hikes.

“It’s still ugly,” a trader said. “A lot of stuff just continues to get beaten up.”

Toys “R” Us Inc. was on the decline, just one day after the company revised the interest rate on its new term loan. The dip could signal that investors don’t have much confidence in the retailer as it tries to muddle through the holidays.

Meanwhile, Advanced Micro Devices Inc. retreated further, following news out midweek regarding the exit of its president and chief executive officer.

And the coal sector was again under pressure, as China readies to raise tariffs on coal imports and Morgan Stanley downgraded the sector as a whole.

“Coal keeps getting beat up,” a trader said. “It’s like a broken record.”

Fannie Mae and Freddie Mac preferreds were again rising Friday and dominating overall trading in that space.

A market source said the preferreds were “up a bit... I’m assuming it was because [Fairholme Funds] formally went ahead with the appeal,” referring to a Sept. 30 decision by federal judge Royce Lamberth in which he dismissed investors’ lawsuits regarding what they claimed was an illegal takeover by the government of a majority of the agencies’ profits.

In the most actively traded issues, the shares were up 15% to 18%, the source said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.