Recent losing streak by US low-quality stocks raising concerns

New York

THE last time corporate leverage weighed as heavily as it is now on US stock selection, equities were in the grips of a decline that wiped out US$1 trillion in market value.

The concern is visible in a Goldman Sachs Group Inc index of American equities backed by the weakest balance sheets, which is down for five straight days, according to data compiled by Bloomberg. It's the longest losing streak since the lead-up to the February low, when investors ditched debt-ridden companies in anticipation of broader declines.