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Corporate bonds buck

bear sentiment to end up

NEW YORK: US high-grade corporate bonds bucked this week's bearish trend to close markedly higher along with US Treasuries an inflation worries abated, dealers said on Friday.

Yield spreads to governments held firm after the release of benign March consumer prices and retail sales and an over three point drop in the University of Michigan's preliminary index of consumer sentiment which took the edge off growing inflation worries spurred by rising commodity prices.

Some analysts said a retrenchment of prices was long due after the sharp sell-off seen earlier in the week.

"The market overreacted and is now making amends," said one high-grade dealer.

The day's most active issue was five-year Disney paper which tightened three basis points to a 32 basis point spread over Treasuries in a liquid market.

The junk bond market closed up a half a point in moderately active trade.

Trump Atlantic City Associates 10-year paper, which priced at par Thursday in a blow-out deal three-times oversubscribed, closed up 1/2 a point at a 102-1/4 bid.

Other junk bond winners of the day included Bruno's Inc, which gained a point at 97, Ralphs Grocery, up 3/4 to 97 bid and WCI Steel, which gained 1/2 to close at par.

"The Treasury and stock markets are up, the CRB (commodities) index is down...it looks like we're ending the week on a positive note," one high-grade trader said.

Syndicate officials said the high-grade new issue calendar looks almost nonexistant sae a big $1.1 to $1.2 billion bond deal by Travelers/Aetna Casualty's expected next week.

A smattering of junk bonds deals are scheduled including a $150 million offering from Intercel Inc.

In the government market, the 30-year long bond closed up 1-18/32 at 89-25/32 to yield 6.80 percent.-Reuter