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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Spekulatius who wrote (37682)	4/30/2010 5:44:00 AM
From: puborectalis	Respond to of 78750

April 30 (Bloomberg) -- Buyers of high-yield, high-risk debt are betting that President Barack Obama is leading the U.S. economy to an enduring recovery. Investors have gobbled up $99.6 billion of junk-bond sales in 2010, a record for the first four months of the year, including the most bonds to fund dividends for private-equity firms since before the credit crisis began in August 2007, according to data compiled by Bloomberg and Standard & Poor’s LCD. Prices for the average speculative-grade security climbed to 99.7 cents on the dollar this week, the highest since June 2007, up from 54.8 cents in December 2008, according to the Bank of America Merrill Lynch U.S. High Yield Master II Index. The return of an appetite for risk shows growing confidence that the U.S. will avoid a double-dip recession, said John Lonski, chief economist at Moody’s Capital Markets Group. Profits for companies in the Standard & Poor’s 500 Index surged 176 percent in the final three months of 2009, and the U.S. economy grew at a 3.3 percent annual pace in first quarter, according to the median forecast of 85 economists surveyed by Bloomberg News, after expanding 5.6 percent in the fourth quarter. The junk-bond rally demonstrates “a sense that the worst is over for the U.S. economy and that a self-sustaining recovery could materialize by the summer,” Lonski said in an interview from his New York office. High-yield, or junk, bonds are those rated below Baa3 by Moody’s Investors Service and lower than BBB- by Standard & Poor’s.