Midday Commentary: Steel Dynamics flat to lower after earnings; Regis trades actively

By Rebecca Melvin

New York, Jan. 28 - Despite new economic data and a few earnings reports, convertibles trading got off to a fairly slow start early Tuesday, market players said.

Steel Dynamics Inc.'s 5.125% convertibles due June 15, 2014 traded at 105.75, which was the bid side of Monday's spread, while shares of the Fort Wayne, Ind.-based steel company were also weak after earnings that were in line with expectations.

Steel Dynamics' results contrasted with fellow steel company AK Steel Holding Corp., which reported earnings and revenue that beat expectations, and shares of the West Chester, Ohio-based steel products maker surged 14% to about $6.85. But AK's 5% exchangeable notes due 2019 were not heard in trade.

Regis Corp.'s convertibles remained active after the bonds of the Minneapolis-based hair salon operator expanded on Monday following disappointing earnings, a New York-based trader said.

Regis' 4.5% convertibles due July 15, 2014 were trading around 101.25 to 101.375 in the early going with shares lower by about 1%. The pullback in the convertibles looked to be in line with the shares.

Equities were up slightly amid mixed economic data. Consumer confidence rose in January to an index level of 80.7 from a revised 77.5 in December, the Conference Board said Tuesday. The January index was higher than economists expected.

But the Commerce Department reported that durable goods orders fell in December by 4.3%, pulled down by weak demand for transportation equipment, primary metals, computers, electronic products and capital goods. Economists had been expecting a 1.8% rise in durable goods orders in December.

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