Stock plunge, earnings worries sideline players, pressure prices

By Ronda Fears

Nashville, Tenn., July 10 - It was a depressing day in the convertibles market as stocks fell sharply for the third straight session, traders said. Heightened worries about corporate earnings and other concerns, like corporate governance as Qwest revealed a criminal investigation into its business, weighed heavily and sidelined most players.

"All I'm seeing is red," said a convertible trader at a hedge fund in New Jersey.

"It's very depressing."

Amidst nearly everything heading south, biotech stocks were hammered and that was largely blamed for the broad stock indexes falling so hard. Automakers also were slammed notably.

The Dow Jones Industrial Average fell 282.59 points, or 3.11%, to 8813.50 while the Nasdaq lost 35.11 points, or 2.54%, to 1346.01.

"Trading was spotty," said Jeff Siedel, head of convertible research at Credit Suisse First Boston.

"There's no leadership to this market. You don't find a lot of buyers, only sellers."

Players can't really even shop the market, he said, because sellers are so eager that you have to be serious about accumulating a position if you put a bid out there.

Some hedge fund players had been getting into position for an uptick in the market and many have already been burned. There have been others, however, that have maintained a negative bias to stocks throughout.

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