Why are corporate high yield bonds getting hit in this market?

I'm trying to better understand why corporate high yield bonds are so weak in this market. I own PHK, for example, which is closed-end high yield bond fund. I understand that the credit crunch is moving into the corporate area, so are people concerned that default rates are going to rise? Is that what's causing the weakness? Thanks for your help.

(Please don't give answers like it's just the market sentiment - I want to understand the specific risks people are concerned about)

Ok, since you state your goal is to understand I will take a moment to explain how this works. If you want further clarification you can email me directly.

High Yield bonds carry that title due to the nature of the underlying investment. These bonds pay a "high yeld" because they are significantly less secure for some reason.

This makes them trade a bit more like equities due to the volitatlity of the risk/reward nature of these bonds.

When investors become wary they flee from risk toward security. Though the name "bonds" gives the appearance of safety, the "high yield" removes the safety and places them in the zone of that which people are fleeing.

I hope that this makes sense to you.

High yield is another way of saying "high risk". The is great concern about high risk loans and there is a shortage of cash available to high risk borrowers. That means the rates go up and those holding existing bonds see their holdings values drop.

specific risks? how about all risks are being re-evaluated.
for years now there has been noo narrow a spread between junk and AAA.. Now due to the subprime fears people are rethinking how much they think is fair.... so the bottom dropped out of the bid price for high yield.

look.... 2 years ago an Iraqi debt issue was priced at a 9% yield..... would you accept an extra 4% for the risk that Iraq stayed a nation and repayed its debt and it's currency didnt devalue too quickly>???

it wasnt one or two specific risk scenarios... it was a general re-assesment of compensation for risk that brought about a repricing.