Midday Commentary: New issues still absent; homebuilders in focus; LifePoint regains footing

By Rebecca Melvin

New York, Sept. 24 - Convertibles remained mostly quiet in early trade on Tuesday on the absence of any new issue activity in the United States so far this week.

There was some focus on the homebuilders after both Lennar Corp. and KB Home reported quarterly earnings and those shares moved modestly higher.

Lennar's 2% convertibles due 2020 were higher outright but came in about 0.25 point on dollar-neutral, or hedged, basis after the Miami-based homebuilder beat estimates and shares traded up 3.7%. KB Homes reported higher quarterly profit as prices gained. KB shares were up 1.2%.

Meanwhile, LifePoint Hospitals Inc.'s 3.5% convertibles due May 2014 were a touch stronger after weakness in the past week that has pushed the bonds lower by about a point, a New York-based trader said.

A second New York-based trader said there has been a seller of the LifePoint bonds. That paper printed at 104.878 and 105.875 on Tuesday, up from 104.54 to 105.125 on Monday, according to Trace data. Shares of the Brentwood, Tenn.-based rural hospital owner and operator were off 5 cents at $45.98 in early action.

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