UPDATE 1-U.S. commercial paper falls for 5th week - Fed

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NEW YORK, May 1 (Reuters) - The U.S. commercial paper market contracted for a fifth straight week, squeezed by economic weakness and concerns about credit quality, analysts said.

For the week ended April 30, the size of the U.S. commercial paper market, a vital source of short-term funding for daily operations at many companies, fell by $21.2 billion to $1.764 trillion, down from $1.785 trillion the previous week, Federal Reserve data showed on Thursday.

"A very large proportion of the drop reflects the weakening economy, but it may have been exacerbated by some concerns on the asset-backed sector again, probably in auto loans and credit card loans," said Tony Crescenzi, chief bond market strategist with Miller, Tabak & Co in New York.

The closely watched asset-backed commercial paper sector, hit by widening fallout from the subprime mortgage debt and credit crisis since August, contracted a fourth straight week.

Asset-backed commercial paper outstanding fell $17.7 billion after falling $10.8 billion the previous week, to $749.4 billion from $767.1 billion the previous week.

Unsecured issuance by financial firms fell $4.7 billion in the latest week after a $16.0 billion fall the previous week. (Reporting by John Parry and Chris Reese; Editing by James Dalgleish)