Over $2 billion of new deals were met by good investor demand yesterday and secondary prices improved marginally.

But the improved tone was tempered by widespread caution and some obvious signs of bearishness. Continued selling and year-end defensiveness left the market with a widely mixed sentiment and a spy vs. spy psychology. For example, a large firm based in New York put $64 million New York Port Authority of New York and, New Jersey 5.20s of 2020 out for the bid during the morning session. The bonds were offered at 5.40% less 1/4, but did not trade, sources said.

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