Blue-chip U.S. companies are slowing down on borrowing aftermonths of massive bond sales and hanging onto the moneythey've raised to insulate themselves from the pandemic.

The biggest U.S. banks hardly sold any notes after postingearnings, a time when they often issue heavily. Overall, corporatebond sales in July dropped by a third to about $60 billion from thesame time last year, according to data compiled by Bloomberg.

Corporations' reluctance to spend now reflects the intensity ofthe downturn that the Covid-19 pandemic is triggering. The U.S.economy shrank at an annualized pace of 32.9 percent in the secondquarter, the steepest drop since at least 1947, according to areport issued Thursday. Any slump in corporate expenditure willonly make the downturn worse, and underscores the limits of the Federal Reserve flooding thefinancial system with money if parties are wary of spending.