Preferred stocks end strong after volatile week; Morgan Stanley, GE profits top forecast

By Stephanie N. Rotondo

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

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 preferreds issues, most of the paper was heading higher.

There were also gains in GE Capital’s notes.

Morgan Stanley saw an 83% increase in its third-quarter profit, which helped push its preferred shares into higher territory.

The most actively traded issue – the 6.375% series I fixed-to-floating rate noncumulative preferreds (NYSE: MSPI) – improved a dime to $25.29. The 7.125% series E fixed-to-floating rate noncumulative preferreds (NYSE: MSPE) – the second most actively traded issue of the structure – were 7 cents better at $27.12.

The 6.625% series G noncumulative preferreds (NYSE: MSPG) gained the most, rising 22 cents to $25.51, while the 6.875% series F fixed-to-floating rate noncumulative preferreds (NYSE: MSPF) improved 11 cents to $26.50.

The 6.6% capital securities (NYSE: MSZ) put on 3 cents to $25.27.

GE also released quarterly results on Friday that beat expectations.

In response, GE Capital’s so-called “baby bonds” were on the rise.

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