Market winding down for holiday weekend; Adelphia gains on Rigas deal

By Ronda Fears

Nashville, Tenn., May 23 - The convertibles market ended higher almost across-the-board, but traders said there was some selling in chip names while investors seemed to be moving to more stable sectors. Biotech buying also continued and new issues were sharply higher.

Adelphia firmed again as buyers were heartened by a deal between the compnay and the Rigas family whereby the family evacuated four board seats, giving up control, and has to transfer some $1 billion of cable assets to the company.

"We got off to a rocky start, but the data was good for the market. It seemed, though, that in terms of trends, at least on a modest scale people were looking for stability, security," said the head trader at a major investment bank.

"They were looking at the financials, transportation, utilities, industrials."

Traders said the session began heading south in sloppy trading but turned north after the government reports showing new orders for durable goods were higher than expected and jobless claims were lower.

Activity was toned down considerably in the afternoon, however, as many players began winding up business for the long Memorial Day weekend. Some were taking Friday off as well as Monday, when the markets close to observe the holiday.

"It's been a wild ride lately, what with the Adelphia situation, and just a lot of stress," a trader said.

"We need a long weekend."

Adelphia drew in buyers again Thursday as the Rigas deal was confirmed by the company, and while the stock that reopened fell sharply, the convertibles gained nicely on the news.

Investors are feeling at bit more comfortable about recovery levels, but not everyone is convinced the company can avoid bankruptcy.

With the recent blowups since Enron's collapse last autumn, many of which have been surprises like Adelphia, traders said people are wanting to boost their portfolios with more stable sectors. Also, many are finding good deals, if not bargains, there.

The UPS 1.75% due 2007 gained 1.5 points to 98.75 bid, 100.25 offered. The shares closed up 37c to $58.43.

The Continental Airlines 4.5% due 2007 added 1.625 points to 90.5 bid, 91.375 offered. The shares closed up 86c to $23.27.

GATX Corp.'s 7.5% due 2007 rose 2.5 points to 120.25 bid, 120.75 offered. The shares closed up 70c to $32.95.

EGL Inc.'s 5% due 2006 gained 2.75 points to 117 bid, 118 offered. The shares closed up 54c to $16.74.

Inco.'s 0% due 2021 added 1 point to 64.375 bid, 64.625 offered. The shares closed up 56c to $22.01.

Ohio Casualty's 5% due 2022 rose 1.125 points to 116.75 bid, 117.25 offered. The shares closed up 34c to $21.42.

There was some notable selling in semiconductors, one trader said. The trader said there was some profit taking in some cases, like with Teradyne.

The Teradyne 3.75% due 2006 dropped 3.25 points to 131 bid, 131.5 offered. The stock ended down $1.06 to $28.

Not all the buying was to safe-haven sectors, however. Biotech was credited with giving the market its impetus after the economic data was released, once news hit the tape that Biogen had gotten some level of approval for a psoriasis drug.

The Amex biotech index gained 7.4%.

One of the frequent names mentioned from that sector was Amgen, whose 0% due 2032 was up 1.25 points to 70 bid, 70.25 offered with the stock up $3.27 to $52.70.

New paper was also sharply higher.

Bershire Hathaway's new negative 0.75% issue soared 4 points, a dealer said. Bershire Class A shares closed up $200 to $76,100.

The Toys R Us 6.25% mandatory gained 0.30 point to 51.55. The underlying stock closed up 25c to $17.93.

The Charming Shoppes 4.75% convertible notes gained 3.25 points to 104.5 bid, 105.5 offered. The stock closed up 22.44c to $7.67.

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