LifePoint gains in hungry market; El Paso drops on "bad" news

By Ronda Fears

Nashville, Tenn., May 17 - LifePoint Hospitals Inc.'s deal, which sold at the cheap to middle of guidance, gained ground in the aftermarket on high demand for new paper and a general buying trend in healthcare, drugs and biotech names.

El Paso Corp., however, was fighting an uphill battle on two fronts - an industry report linking the company to newly discovered Enron documents and a New York Times story alleging the company was involved in "wash" broadband trading similar to the "round trip" energy trading deals that has devastated the power sector recently.

In separate news releases, El Paso said the stories were wrong, but its securities lost ground nonetheless.

Generally, traders and market sources said activity was very slow Friday.

"It was really slow today, all week really, from a trading perspective. Nothing really looks good right now," said John Seibel, head trader at Silverado Capital Management. "Things still need to come in a little bit more."

Not all were bears, however.

There were some buyers seen in biotech names, particularly.

Yavoslav Motuzenko, a convertible analyst at Wachovia Securities, pointed out that several biotech convertible names will be presenting at the American Society of Clinical Oncology conference that kicks off Saturday.

Abgenix, Celphalon, Enzon and Ivax convertibles were sharply higher, and all are presenting at the cancer drug conference. Traders notes those are busted converts, so mostly yield-seekers were buying those names. Other biotech paper sharply higher included Human Genome's 5.5% due 2006.

Also presenting at the conference, Motuzenko said, are Amgen, Cell Therapeutics, Chiron, Genentech, Elan, IDEC Pharmaceuticals, ImClone, ISIS, Ivax, Medtronic, MedImmune, Medarex, Millennium Pharmaceuticals, OSI Pharmaceuticals and Protein Design Labs.

ISIS and OSI both have new issues in play, but were only slightly higher, one trader said.

Other new paper was widely mixed and trading sloppy, traders said.

"The new deals, these small ones we've seen come along lately, don't trade a lot after the first week," one dealer said.

LifePoint's new 4.5% due 2009, which has a 30% initial conversion premium, gained 3.625 points from par to 103.625 bid, 104 offered with the stock recouping 99c to $37.42.

The deal, along with the overall interest in health-related names, reminded the market of Province Healthcare, another rural hospital operator.

One dealer said the Province convertibles gained 1.25 points with the 4.5% due 2006 at 109.25 bid, 110 offered and the 4.25% due 2008 at 107.875 bid, 198.875 offered. Province shares ended up 47c to $23.69.

Tech names were also mixed, a hedge fund trader said, with lots of two-way quotes particularly in chip names.

"I have been a mild seller of tech," said the hedge fund trader, based in New York, "but now I worry trees do grow to the sky."

Some tech names were continuing to climb, like Symantec, ATMI and Network Associates.

One trader also noted that while most the telecom group were lower, Nortel Networks was higher on "a couple of big trades." The Nortel 4.25% due 2008 was quoted up 2.375 points to 59.75 bid, 60 offered as the common added 29c to $2.85.

A few telecom equipment names joined the party, even Lucent, but the bulk of the telecom related areas were lower, traders said.

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