Nearly ideal conditions ushered a flood of junk-bond issues to market last week. About $3.5 billion of issues were priced, according to KDP Investment Advisors, and $99.4 million flowed into high-yield mutual funds, according to AMG Data Services.

"I wouldn't call it euphoric, but there's certainly a good tone," said portfolio manager Doug Forsyth of the Nicholas Applegate High Yield Fund, San Diego. "It's very healthy to have new and better credits, and it just tests portfolio managers and analysts to bear down and cover the terrain."

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