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Corporate bonds

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NEW YORK: US high-grade corporate bonds closed up with US Treasuries fuelled by a mid-afternoon flurry of activity in the government market that saw the long-bond soar, high-grades traders said on Friday.

"We were dragged up with the long-bond in late trading and spreads held in there with no noticable widening, or tightening," said one high-grades trader.

Most of the week's new issues were from finance companies.

"Industrials are not issuing because they're flush with cash whereas the finance companies and banks can always use capital at low rates," one trader said.

Junk-bonds also took part in the mid-afternoon rally closing up about a half point overall.

"Even (junk) bonds that were lackluster early in the week closed the week firm," said one high-yield trader.

The supermarket sector, including Ralphs Grocery and Bruno's Inc, regained earlier losses closing unchanged.

This week new issuance for high-yield paper was very weak with another quiet week expected next week as issuers wait until after Labour Day to come to market.

About $4 billion of junk debt is already slated to price in September, traders said.

Many traders believe the heavy forward calendar will pressure prices down next week.

In the governments market, the 30-year long-bond closed up 1-11/32 at 102-3/32 to yield 6.71 percent.-Reuter