Preferred stocks quiet amid New York snowstorm; Fannie, Freddie firm; financials mixed

By Stephanie N. Rotondo

Seattle, Feb. 9 – Inclement weather on the East Coast was not helping the preferred stock market get any more active, a trader said on Thursday.

“A lot of people aren’t in,” the trader said of the snowstorm that hit New York. The storm was expected to dump at least a foot of snow in the Tri-State area.

Given the limited liquidity, preferreds were mixed in early dealings but ultimately finished the session with a weaker tone.

The Wells Fargo Hybrid and Preferred Securities index declined 13 basis points, after being up 4 bps at mid-morning. The U.S. iShares Preferred Stock index dropped 12 bps by the bell.

There continued to be activity in GSE-linked preferreds, despite the day’s muted tone. The paper even managed to continue its upward climb.

Fannie Mae’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) rose 29 cents, or 2.84%, to $10.49, while Freddie Mac’s 8.375% fixed-to-floating rate noncumulative prefereds (OTCBB: FMCKJ) improved 24 cents, or 2.41%, to $10.20.

Meanwhile, AXIS Capital Holdings Ltd.’s 5.5% series E noncumulative preferreds (NYSE: AXSPrE) were also on the busier side, relatively speaking.

The preferreds ticked up 7 cents to $23.02.

Among financials, Morgan Stanley & Co. Inc.’s 5.85% series K fixed-to-floating rate noncumulative preferreds (NYSE: MSPrK) fell with the market, slipping 2 cents to $25.47.

And, State Street Corp.’s 5.35% series G fixed-to-floating rate noncumulative preferreds (NYSE: STTPrG) rose a penny to $26.01.

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