US commercial paper market shrinks for 2nd week-Fed

NEW YORK Nov 12 (Reuters) - The U.S. commercial paper market contracted for the second straight week, interrupting the previous three months' expansion trend, Federal Reserve data showed on Thursday,

The market can be a gauge of economic activity as it is a vital source of short-term funding for daily operations at many companies. However, technical factors and seasonal adjustment distortions may have contributed to the recent setback, analysts said.

For the week ended Nov. 11, the size of the U.S. commercial paper market fell by $76.6 billion to $1.239 trillion outstanding from $1.315 trillion outstanding the previous week.

U.S. asset-backed commercial paper fell to $510.3 billion outstanding in the latest week from $515.0 billion outstanding the previous week.

(Reporting by John Parry and Walden Siew; Editing by Chizu Nomiyama)