Tax-exempt prices idled in the face of Treasury gains yesterday as reluctant traders moved cautiously ahead of this week's new-issue slate.

Treasury prices were 1/2 point higher near the open as bullishness, inspired by Friday's employment report, spilled into yesterday's session. Governments kept their gains throughout the session, despite the $36 billion of securities to be auctioned over the next three days.

But tax-exempt traders were hesitant to follow the Treasury market after the beating the Street took during the recent price correction, which saw bond prices fall approximately three points.

"A lot of people were badly hurt last week and there is a reluctance to get involved right here," said one trader. "Now it's matter of licking the wounds and getting healthy again before municipals respond to the bullishness in the Treasury market."

By session's end, some dollar bonds eked out 1/8 point gains, but prices were narrowly mixed on average, while high-grade bonds were unchanged, traders said.

In the debt futures market, the September municipal contract settled up 4/32 to 98.31, while the MOB spread was calculated at negative 234.

Increasing supply also gave market players reason to pause. The Bond Buyer calculated 30-day visible supply at $7.74 billion yesterday, the highest total since Nov. 18, 1991, when the slate featured $8 billion of new deals.

Secondary supply was also on the rise as new deals flooded the Street. The Blue List of municipal bonds, sometimes used as an approximate gauge of dealer inventory, jumped to $1.49 billion. That figure represents a $614 million gain from July 24, when The Blue List stood at $880 million.

"Municipals are cheap to governments but buyers have been playing coy and we're hung up here," a trader said. "There's still a lot of money out there, but they've got the Street offsides and the upcoming calendar is staggering. I say we stick to these levels until we see how those deals perform or the Treasury market takes off."

Negotiated deals dominated new-issue activity yesterday and underwriters were able to lower some yields, mostly on serial bonds.

Leading action, Goldman, Sachs & Co. priced and repriced $221 million of Massachusetts Housing Finance Agency residential housing bonds.

At the repricing, Series D serial bond yields were lowered five to 10 basis points between 1993 and 2001, while Series F serial yields were lowered by five basis points from 1988 through 2001.

The final reoffering scale included $119 million of Series E bonds prices at par to yield from 2.70% in 1993 to 5.60% in 2004. Term bonds were also prices at par to yield 6.125% in 2008, 6.25% in 2012, and 6.25% in 2014. There also was $76 million of Series F bonds prices at par to yield from 4.75% in 1998 to 5.60% in 2004. Term bonds were priced at par to yield 6.25% in 2012 and 6.30% in 2024.

The managers said they expected Moody's and Standard & Poor's to rate the bonds triple-A.

First Boston Corp. priced and repriced $106 million of Farmington, N.M., Utility System revenue bonds to lower the term bond yield by about four basis points.

Serials were priced to yield from 3.10% in 1993 to 5.90% in 2007. A 2013 term maturity, containing $65 million of the loan, was priced as 5 3/4s to yield 6.148%.

The bonds are insured by the Financial Guaranty Insurance Co. and triple-A rated by Moody's, Standard & Poor's, and Fitch Investors Service.

Bear, Stearns, & Co. priced and repriced $75 million of Orlando Utilities Commission, Fla., water and electric subordinated revenue bonds to lower yields by about two basis points.

The final reoffering scale included a 2020 term maturity, containing $35 million of the loan, priced as 6s to yield 6.13% and a 2027 term priced 5 1/2s to yield 6.089%.

The bonds are rated Aa by Moody's and AA-minus by Standard & Poor's.

In follow-through business, First Boston released $701 million of San Antonio, Tex., Electric and Gas Systems revenue refunding bonds from syndicate restrictions.

In late secondary trading, the 5 3/4s of 2011 were quoted at 96-1/8 to yield approximately 6.10% on the bid side, right at the original reoffering yield. The 5s of 2017 were quoted at 85 7/8-86 yield 6.13%, which were originally priced to yield 6.10%.

A $297 million issue of Lower Colorado River Authority, Tex., junior lien refunding revenue bonds were released from syndicate restrictions by senior manager Goldman Sachs.

In late trading, the FSA-insured 5 5/8s of 2017 were quoted at 93 1/8-3/8 to yield 6.16%, where they were originally priced to yield 6.175%.

Dillon, Read & Co. released $145 million of Delaware Transportation Authority transportation system revenue bonds from syndicate restrictions.

Secondary traders said there was little visible Street float and the bonds were not actively changing hands.

Secondary Trading

Activity was muted yesterday, traders said, and there were only a few bid-lists circulating in the Street.

In secondary dollar bond trading, some bonds managed 1/8 point gains, but were unchanged over all.

Puerto Rico GO 6s of 2022 were quoted late in the session at 98 5/8-99 to yield 6.10% on the bid-side, Wisconsin Transportation Authority 5 1/2s of 2022 were quoted at 91 1/8-5/8 to yield 6.15%, and Los Angeles Department of Water and Power 6s of 2032 were quoted at 97 5/8-7/8 to yield 6.16%. New York City Water Authority FGIC 5 3/4s of 2018 were quoted at 96 1/4-3/4 to yield 6.038%.

In the short-term note sector, yields were narrowly mixed on the day.

In late trading, Iowa tax and revenue anticipation notes were quoted at 3% bid, 2.95% offered, Los Angeles Trans were quoted at 2.80% bid, 2.75% offered, and Wisconsin notes were quoted at 2.90% bid, 2.85% offered. New York City Tans were quoted at 2.80% bid, 2.75% offered and New York State Trans were quoted at 2.95% bid, 2.90% offered.

Postponed Deal

Goldman Sachs, senior manager for $494 million of New York State Medical Care Facility Authority revenue refunding bonds, has postponed the sale, originally set to be priced this week.

The firm said it plans to price the bonds sometime after Labor Day.

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