Midday Commentary: J.C. Penney up on Soros investment; Alcatel-Lucent off on earnings

By Paul Deckelman

New York, April 26 - J.C. Penney Co. Inc.'s bonds were up in early Friday dealings on the news that billionaire investor George Soros had taken a 7.91% stake in the troubled Plano, Texas-based retailer's stock.

A trader saw Penney's 7 1/8% notes at 102 bid, 102 5/8 offered, up from 101½ bid, 102 late Thursday, remarking that "it looks like Soros is drawing some support."

Penney's 5.65% notes due 2020 gained ½ point to 83¼ bid.

Alcatel Lucent's 6.45% notes due 2029 were quoted down 1¾ points to 77¼ bid after the Paris-based communications equipment manufacturer reported a fourth consecutive quarterly loss. It reported a first-quarter net loss of €353 million, versus its year-earlier earnings of €259 million, even though revenues rose 0.6% to €3.23 billion, which was better than analysts were expecting.

A second trader saw the bonds at 76¾ bid, 77½ offered, calling them down from Thursday's 77-78 context, with its "stock down a touch."

Also on the earnings front, Goodyear Tire & Rubber Co.'s 7% notes due 2028 were unchanged at 101 bid, 102 offered.

Among new deals from Thursday, AES Corp.'s 4 7/8% notes due 2023 had moved up to 101½ bid, 101 7/8 offered; the Arlington, Va.-based power producer had priced $500 million of the quick-to-market notes at par.

Overall, the KDP High Yield Daily index firmed to 75.94 at mid-morning, down 2 basis points from Thursday's close, while its yield was unchanged at 5.27%.

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