WASHINGTON – Wall Street companies sharply scaled back their borrowing from the Federal Reserve's emergency lending program over the past week while commercial banks boosted it slightly.

The report, released by the Fed Thursday, offered mixed signals about credit conditions.

Investment firms averaged $1.7 billion in daily borrowing for the week ending July 2. That compared with $6.1 billion the previous week. The reduction suggested the Wall Street firms are feeling less of a need to turn to the Fed for quick source of cash, an encouraging sign.

The investment houses were given similar loan privileges as commercial banks in March after a run on Bear Stearns pushed the nation's fifth-largest investment bank to the brink of bankruptcy and raised fears that other Wall Street firms might be in jeopardy. The company was taken over by JPMorgan.

Banks, meanwhile, averaged $14.9 billion in daily borrowing for the week. That compared with $14.7 billion in the previous week. The pickup indicated that banks are still going to the Fed to help them overcome credit stresses.

The identities of commercial banks and investment houses are not released.

In the broadest use of the central bank's lending power since the 1930s, the Fed in March scrambled to avert a market meltdown by giving investment houses a place to go for emergency overnight loans. The program will continue for at least six months. Commercial banks and investment companies now pay 2.25 percent in interest for the loans.

In a new addition to the weekly report, the Fed said the portfolio of certain assets it took over from Bear Stearns is now estimated to be worth $28.9 billion. Maiden Lane LLC holds the portfolio of assets.

As part of JPMorgan's takeover of the troubled investment firm, the Fed provided a loan of $28.82 billion. JPMorgan will absorb the first $1.15 billion of any losses that could occur on the holdings.

Democrats in Congress and other critics contend the Fed's financial involvement in the deal – along with its decision to provide emergency loans to Wall Street firms – are akin to a government bailout and are putting billions of taxpayer dollars at risk.

However, Fed Chairman Ben Bernanke has defended the actions, and in appearances on Capitol Hill has said he doesn't believe taxpayers will suffer any losses.

Separately, as part of efforts to relieve credit strains, the Fed auctioned $26.1 billion in Treasury securities to investment companies Thursday.

The auction drew bids for less than the $50 billion the Fed was making available, which was viewed as possible sign of some improvements in credit conditions.

In exchange for the 28-day loans of Treasury securities, bidding companies can put up as collateral more risky investments. These include certain mortgage-backed securities and bonds secured by federally guaranteed student loans.

The auction program, which began March 27, is intended to make investment companies more inclined to lend to each other. A second goal is providing relief to the distressed market for mortgage-linked securities and for student loans.

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