Peabody weakens on natural gas report; Quiksilver takes hefty hit; Fannie, Freddie rebound

By Stephanie N. Rotondo

Phoenix, June 11 – A couple distressed credits were getting knocked around in Thursday trading, even as the rest of the market rebounded from losses throughout the beginning of the week.

Peabody Energy Corp. was one such name. However, a trader said the bonds recovered from their intraday lows, but still ended with a negative tone.

One trader deemed the debt off as much as 5 points.

On Monday, the St. Louis-based coal producer said it was cutting 250 jobs and shutting two of its offices in an effort to save costs. The plan is expected to result in savings of $45 million annually.

Meanwhile, Quiksilver Inc. paper took a pretty serious hit. The clothing manufacturer and retailer reported disappointing earnings earlier in the week and pulled its forward-looking guidance as a result.

But one trader said the drop only confirmed where levels had been quoted.

Fannie Mae and Freddie Mac preferreds easily dominated trading again on Thursday and also saw a rebound following the previous day’s losses.

Fannie’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) rose 21 cents, or 5.5%, to $4.03 on over 3.5 million shares trading. Freddie’s 8.375% fixed-to-floating rate noncumulative perpetual preferreds (OTCBB: FMCKJ) meantime improved 20 cents, or 5.24%, to $4.02, with 8.66 million shares being exchanged.

On Wednesday, the preferreds had drifted lower and, according to a market source, it was due to a couple of research reports that were circulating.

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