By Richard A. Bravo
NEW YORK, Oct 27 (Reuters) - Yield margins in the U.S. high-grade corporate bond market began Monday around one to two basis points tighter, with auto names rallying early but giving up some gains to remain marginally tighter to unchanged.
"There isn't a lot of activity today, but things are looking a little better," said one trader.
The automobile sector took a hit last week after Standard & Poor's downgraded DaimlerChrysler's credit rating and warned that it may cut the ratings on Ford Motor Co. Some auto names widened out nearly 100 basis points after the S&P announcement, curbing what had been nearly a year-long run for the sector.
Early on Monday morning, Ford Motor Credit Co.'s 7.00 paper due 2013 traded at 311 basis points over Treasuries, five basis points tighter on the day, according to MarketAxess. Last week, that issue traded as wide as 333 basis points over Treasuries.
General Motors Corp.'s 7.125 percent paper due 2013 was unchanged at 235 basis points over Treasuries, according to MarketAxess. Last week, that issue traded as wide as 251 basis points over Treasuries.
In other markets, U.S. Treasury yields edged higher as the market anticipated a series of strong U.S. economic reports this week. The benchmark 10-year note was quoted down about 6/32 to yield 4.275 percent.
To see upcoming and recent corporate bond sales, click on [nNEUBD4].