US credit protection narrows following Wall Street equity rally

The price of credit default swaps for major US names tightened this week following two days of equity purchasing on Wall Street.

Equity investors shrugged off mediocre economic news and pushed up the Dow Jones Industrial Average and the S&P 500 to the highest levels in more than a month. The positive sentiment pulled in credit protection costs for names including AOL Time Warner and Delphi, which have seen notable spread-widening in recent weeks.Credit protection on communications company AOL has contracted 110 basis points during the past two days and traded today at 610/660bp. AOL's protection costs widened 125bp to

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