Another oil drop weighs on E&P sector; Cliffs Natural Resources gains; JCPenney weakens

By Stephanie N. Rotondo

Phoenix, Jan. 6 – There was “more E&P pain with what oil was doing,” a distressed debt trader said Tuesday.

West Texas Intermediate crude drifted further into sub-$50 territory during the session, losing $2.23, or 4.46%, to end at $47.81 a barrel for February delivery. Brent crude meantime hit the $50-mark, ending down $2.22, or 4.18%, at $50.89.

While many – if not most – oil and gas credits were trending weaker with the decline in oil prices, there were not too many that were seeing sizable losses.

Among other commodities, a trader said iron ore producer Cliffs Natural Resources Inc. was inching higher on the day.

In the coal arena, a trader said there was “limited trading” in the sector, though he saw Arch Coal Inc.’s 8% notes due 2019 falling “a couple points” to 53.

Elsewhere in the distressed space, a trader said J.C. Penney Co. Inc.’s 5.65% notes due 2020 fell 1˝ points to 77˝.

Another source placed the bonds at 77 bid, down 2 points on the day.

Late in the day, the Plano, Texas-based retailer announced that its holiday same-store sales improved 3.7% year over year and that it was expecting its quarterly sales increase to be at the higher end of its projections.

The company had previously forecast 2% to 4% sales growth.

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