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Corporate debt, job less figures curb fears of recession

Nov 23, 2011 Mike Garretson

While fears of another recession have plagued lenders and investors in recent months, prompting many to rein in spending and speculative activity, a string of reports released Thursday may put such fears to bed. The North America Investment Grade Index of credit default swaps by Markit Group dropped 0.5 basis points to a mid-price of 133.5. The index is referenced by investors to hedge against losses on corporate debt or to weigh credit decisions and values, Bloomberg reports. "Traders pushed the index lower after a report showed fewer Americans than forecast filed first-time claims for unemployment insurance payments last week, an indication the economy may be gaining traction, which would strengthen corporate balance sheets," John Parry reports for the source. The Labor Department reported Thursday that the number of Americans applying for unemployment benefits dipped to the lowest level since April last week. Coupled with the company credit index, analysts agree the jobless claims suggest the economy is not headed for a downturn in the fourth quarter. However, Europe's debt crisis may continue to rack demand for U.S. exports and further stall the recovery.