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Weak earnings, market weigh on U.S. Steel, AK Steel; Sprint remains strong; JBS rallies
By Stephanie N. Rotondo
Seattle, Jan. 27 – Earnings and the latest announcement from the Federal Reserve put pressure on distressed bonds on Wednesday, though overall liquidity was limited.
“It was a lackluster day,” a trader said. “Everyone was waiting on the Fed and then markets got hit. But volume was low.”
The central bank said Wednesday that it would keep interest rates steady for the time being, after raising rates for the first time since the financial crisis in December. However, the Fed said that a March hike was still possible.
In earnings news, United States Steel Corp. released its fourth-quarter results late Tuesday, showing its third-largest quarterly loss. The steel producer also warned that its cash burn could continue through 2016.
On the heels of the news, the bonds took a hit. Fellow steelmaker AK Steel Holdings Corp. also saw its debt drop.
For its part, AK Steel put out its earnings before the market closed on Tuesday. Revenue and adjusted earnings beat estimates, though the company swung to a loss from the year before.
Meanwhile, Sprint Corp. paper continued its rebound in the wake of its own earnings release on Tuesday. The bonds had gotten hammered in the previous week on concerns that figures would be dismal, but a gain in subscribers seemed to encourage investors.
Also rising were JBS SA’s bonds, which took a dive on Tuesday after it was reported that company executives were being accused of wrongdoing.
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