US corporate spreads were little changed on Friday, while Owens Corning's bond prices tumbled in the high-yield market on a decline in its operating income.
The bankrupt maker of fiberglass insulation's notes were among the most actively traded speculative rated issues on Friday. Although Owens' net sales rose 8 percent, its operating income dropped by $1 million to $168 million from the previous year.
Owens' 7.5 percent note due 2018 fell to 60.75 cents on the dollar, from about 65.6 cents on the dollar, according to MarketAxess.
In the broader high-yield market, investors seem confident that continued economic growth, albeit slower, and loose credit conditions continue to bode well for high yield credits in general, analysts wrote in a Fitch Rating report released on Friday said.
"The high yield market continued its winning streak this week, gaining ground for the sixth week in a row, as corporate earnings reports showed solid gains among key high-yield issuers," the Fitch report said.
More broadly, high-grade spreads were little changed as market participants await the outcome from Federal Reserve officials' decision on interest rates next week.
"We expect the investment-grade cash market to trade in a narrow range in the coming months as the negative effects of volatility induced by alternating fears of inflation and a slowing economy, as well as continued event risk, should be offset by the positive forces driving our market," Ed Marrinan, head of high-grade strategy, at JP Morgan in New York, wrote in a statement released on Friday.
Marrinan said the positive forces in the market include strong corporate earnings, outstanding credit fundamentals, and ongoing investor demand for corporate credit exposure. In other markets, US stocks fell slightly on Friday in a volatile session as concerns about slowing growth offset optimism that the Fed will pause. The Dow Jones Industrial average fell 0.02 percent, or 2.24 points, to 11,240.35.
In the US Treasury debt market, the benchmark 10-year note rose 15/32 for a yield of 4.90 percent.