Distressed bonds decline with broad markets on Greece, China fears; energy names active

By Stephanie N. Rotondo

Phoenix, July 8 – There continued to be weakness in the distressed debt space on Wednesday.

The broader markets were also trending toward the red, as Greece continued to rail against the European Union’s austerity ideas, though Greek officials did relent and say that a more detailed budget proposal was going to be made by the end of the week.

Furthermore, late in the day it was reported that Greece intended to keep its banks closed until Monday.

But that wasn’t the only news investors were considering. China’s stock market remained under pressure, despite attempts by the government to shore up any major losses. And the Federal Open Market Committee released its June minutes, which showed that while Fed officials were seeing bright spots in the U.S. economy, concerns about Greece and China were not being pushed aside.

“Take your pick,” a market source said of the many reasons the market could be sluggish.

Back in the bond market, it was all energy, all the time.

“Energy is still active,” a trader said. “That’s all I’m running into, energy, energy, energy.”

In the coal arena, a trader said Peabody Energy Corp. was “rebounding this morning before renewing their charge downward.”

Among other coal names, a trader saw Alpha Natural Resources Inc. and Arch Coal Inc. on the slide as well.

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