Morning Commentary: Priceline lower outright; earnings in focus; SanDisk convertibles improve

By Rebecca Melvin

New York, Jan. 27 – The Priceline Group Inc. was trading notably in the early going Wednesday after a stock downgrade by Goldman Sachs & Co. But in general, U.S. convertibles were trading lightly as market players eyed various earnings reports due out as well as oil prices and word from the Federal Open Market Committee at the conclusion of its two-day meeting Wednesday afternoon.

Priceline’s three convertible bonds were trading mostly lower early Wednesday after Goldman Sachs downgraded the shares to “neutral” from “buy,” citing the stronger dollar and competition weighing on the Norwalk, Conn.-based online travel company’s performance as well as its focus on markets and customer acquisition techniques as potentially squeezing margin expansion.

Priceline’s 0.35% convertibles due 2020 traded down 1.3 points to 110.976, according to Trace data. Priceline shares were down about 3% at $1,077.37 in the early going.

Trace data also showed Priceline’s 0.9% convertibles due 2021 were at 96.875, which was down only about 0.1 point, and Priceline’s 1% convertibles due 2018 trading down 2.4 points to 127.3.

SanDisk Corp. was expected to report earnings after the market close.

The SanDisk 1.5% convertibles due 2017 were up about 4 points to 142.5, according to Trace data. SanDisk’s 0.5% convertibles due 2020 were at 100, which was up about 0.8 point, and SanDisk shares were in positive territory, up about 0.7% at $64.60.

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