(Adds details on Einhorn's moves in second quarter)
BOSTON, July 25 (Reuters) - David Einhorn's hedge fund Greenlight Capital said on Thursday that it is betting that U.S. corporate debt, both investment grade and high yield, will fall as the country's economic recovery slows.
The fund said the move is attractive on its own, coming at a time that protections for creditors are shrinking, and offers a hedge to its bets that certain stocks will climb, according to a letter to investors seen by Reuters.
"We have taken a new macro position against U.S. corporate credit, both investment grade and high yield," the letter said.
Einhorn took the bet as analysts project corporate earnings will soften into the second half of the year.
Recent data shows that private employers are adding fewer than expected jobs to their payrolls and new orders for manufactured goods dropped in May here for a second straight month, signs the economy may be slowing down.
Einhorn's fund has rebounded in 2019 with a gain of 17.4% in the first half, after sinking 34% in 2018. For months, the fund manager, whose picks are closely watched in the investment world, has been overhauling his portfolio.
In the same letter, Einhorn said the New York-based hedge fund made new bets on chemical company Chemours, retailer Dillard's Inc. and gambling products company Scientific Games Corporation in the second quarter.
News that the fund had invested in those three stocks sent their share prices higher. He described the Chemours stake as "medium sized" and called the other two "small positions."
A bet against Tesla, and bets on gold, car maker General Motors, aircraft leasing company AerCap and automotive seat maker Adient helped the fund to appreciate 5.8% in the second quarter.
Reporting by Svea Herbst-Bayliss Editing by Nick Zieminski and Bernadette Baum