Stock sales show renewed confidence in economy

— -- Companies usually worry about generating money for investors. Now they're looking to generate it from them.

A flurry of banks, Fordf and Microsoftmsft have all begun raising capital from investors this week, either by selling stock or debt. It's the latest sign companies are finally able to build their cash piles from investors who are willing to take on more risk.

"We have willing sellers and willing buyers (of stock and debt). That's what we need," says Linda Killian of Renaissance Capital, adding that it's the first step for companies to prepare for a stronger economy.

And it's not just the lucky few enjoying the increased willingness from investors. Signs that investors are willing to pony up more cash include:

•Rise in stock issuance. U.S. companies that were already public raised a monthly record $26.5 billion by selling additional stock in May so far, Dealogic says. And this year so far, financial and insurance companies have raised a record $26.7 billion from such follow-on offerings.

•Healing corporate bond market. The cost of borrowing for companies with the highest credit ratings has fallen 27% this year compared with U.S. Treasuries of similar maturities, says Merrill Lynchmer. Many companies, even some that don't need the money, are finding that now's a great time to tap the market, says Michael Holland of Holland & Co. Some highly rated companies, such as AAA-rated Microsoft, can borrow at the lowest rates in months if not years.

•Opening stock market for emerging companies. DigitalGlobe, SolarWinds and OpenTable are expected to issue initial public offerings this week and next, Renaissance says.

There's no question companies have different motives for raising money. Ten banks, for instance, must raise $74.6 billion in capital following the government's stress tests of their ability to withstand a weak economy. But the timing isn't all that bad, as the banks are able to sell stock at a time when the stocks as a group have more than doubled in price since March, says Charles Crane of Scotsman Capital. "If companies can bolster their war chests after being frozen out of capital markets for months, that's a good thing," he says.

And while bank stocks sank nearly 4% Tuesday as investors brace for supply, Hugh Johnson of Johnson Illington Advisors says "the fact they can raise capital" is reassuring.

Investors could suffer additional indigestion seeing more new stock hitting the market, especially from banks, says Rod Smyth of Riverfront Investment. But the fact that companies can lure investors says a lot about the financial system's health. "It's not just confidence being built. It's real capital being raised," he says.