Stocking stuffer standoff: coal vs. toys

December 24, 2010, 1:42 AM UTC

The holiday shopping season is supposed to be going well, but you’d never know to look at trading in the biggest U.S. toymaker.

There’s no news on Mattel (MAT) today, but the stock is down 1.5% on a flattish day for the broad indexes. Admittedly, the stock is less than a dollar off its 52-week high after a strong 2010 rally, but going on about profit-taking on the last trading day before Christmas seems so Grinchlike.

What to make of this picture?

Mattel is also the third-worst performing issue in the credit markets. Spreads on credit default swaps referencing the El Segundo, Calif., company widened by 5% Thursday to 164 basis points, according to CMA data, meaning it costs $164,000 annually to insure $10 million of Mattel debt.

But it’s early yet to conclude that Thursday’s toy rout means more kids were naughty than nice this year. Consider, lamely enough, the action in another ridiculous Christmas indicator, the Market Vectors Coal exchange-traded fund (KOL). It was flat Thursday, a day after hitting its 52-week high above $46.

So toys are down and coal is flat, after both had a good run this year. Who knows what we’ll find in the stockings? Let’s just hope Santa didn’t leave his wallet in El Segundo.