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Midday Commentary: Preferred investors playing waiting game as market continues to be soft
By Stephanie N. Rotondo
Phoenix, Oct. 9 - The preferred stock market remained under pressure on Wednesday, though selling was not aggressive, a trader said.
"Things have widened out a little bit, so if you tap a bid for 1,000 shares, you get something moving 30 cents instead of a nickel or a dime," he said.
However, he said that those moves were not as indicative of how the marketplace was performing as compared to moves in newer and bigger deals, such as Citigroup Inc.'s 7.125% series J fixed-to-floating rate noncumulative preferreds (NYSE: CPJ) or Morgan Stanley Co. Inc.'s 7.125% series E fixed-to-floating rate noncumulative preferreds (NYSE: MSPE).
In those issues, Citi's shares were off 4 cents at $25.45 at midday, while Morgan Stanley was trading at $25.29, which was down a penny.
The Wells Fargo Hybrid and Preferred Securities index was meantime off 22 basis points.
The trader said he had been talking with other players in the market and remarked that everyone was operating "under the same mandate: 'Don't do anything crazy; just sit and wait.'"
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