The municipal market finished mixed yesterday, as rumor-driven trading whipsawed prices.

The market was up early, driven by optimism that the Clinton budget would pass, raising tax rates and lowering the deficit. But by late afternoon, the market had given back most of its gains.

Throughout the day, rumors of Congressmen and women climbing on board the Clinton budget bandwagon, or in some cases, asking to get off, drove the both the muni and Treasury markets moderately up and down.

Traders said market players are looking to tomorrow's employment report for guidance. Yesterday's release of the Federal Reserve's so-called beige book report was a "non-event," traders said.

Until the employment report, light trading is expected to continue without a major positive or negative trend. Also, if the Clinton plan falls apart, the market could drop, traders said.

In the cash market, Salt River 5 1/4s of 2019 were quoted at 5.69% bid, 5.66% offered, down about 1 basis point on the day. New York LGAC 5 1/2s of 2018 were quoted at 5.77% bid, 5.75% offered, down about 2 basis points.

Cook County, Ill. MBIA 5 5/8s of 2018 were quoted at 5.78% bid, 5.76% offered, up about I basis point on the day.

In the short-term market, yields were up 3 to 5 basis points.

California's RANs were quoted at 2.90% bid, 2.88% offered; Texas notes were quoted at 2.65% bid, 2.60% offered; and Wisconsin notes were quoted at 2.90% bid, 2.85% offered.

The September municipal futures contract finished down 4/23 to 101. 17. The MOB spread narrowed by 6 basis points to minus 445, as the municipal market outperformed the Treasury market.

The new issues market was relatively quiet yesterday, but at least one major deal is on tap for pricing today.

Merrill Lynch & Co. expects to price a $570 million refunding issue for the New York State Dormitory Authority today. A weak market could force a postponement, however, Merrill officials said yesterday.

Late yesterday, market participants said Merrill had circulated preliminary pricing for a slimmed down, $366 million issue.

But Merrill officials said the size of the deal was still in flux. If the market cannot handle a larger deal, the $366 million issue might not meet the issuer's refunding savings target and would be delayed, they said.

A major institutional buyer said the preliminary pricing was too expensive. Intermediate term serial bonds were priced particularly rich relative to similar bonds in the secondary market, he said.

"They say there is demand from trust departments and crossover buyers, but that will be the real test. Can they sell triple-B, 10- to 18-year paper yielding 5.30% to 5.75%? I'm not sure they can," the investor said.

The issue also could be hurt because many investors will be out of their office for the remainder of the week, in Saratoga Springs at an event hosted by the public finance department of First Albany Corp., one buyer noted.

But the offering should be aided by a relatively light forward calendar of New York deals, other institutional buyers said.

New Deals

In the primary market yesterday, PaineWebber Inc. priced and repriced $143.6 million refunding certificates of participation for the City of Charlotte. N.C. The new COPS will refund a previous COPS issue backing the city's partially constructed convention center.

Serial bonds due in 1998 to 2007 were reoffered at yields ranging from 4.35% to 5.35%. Serial yields were 5 basis points lower than the initial pricing.

A $43 million term bond due in 2013 was repriced to yield 5.62%, down 4 basis points. A $73 million term bond due in 2020 was repriced to yield 5.70%, down 5 basis points. A $27 million term due in 2021 was repriced to yield 5.66%, down 4 basis points.

The city began construction on the facility in February, 1992. As of June 30, 1993, the building was 23% finished at a cost of $29.5 million, the City stated in a preliminary official statement. The complete cost is projected to be $112.0 million.

Late Tuesday, Goldman Sachs & Co. priced an $84 million issue for the University of Minnesota entirely as derivatives. Half the deal will be auction-set, floating-rate securities and the other half will be inverse floating-rate securities.

The ten-year bullet issue locked in a synthetic fixed-rate of 4.84%. about 15 basis points below the rate the University would have received on ordinary bonds, an official on the deal said.

Also late Tuesday, Alex. Brown & Sons repriced a $205.8 million issue of rental housing refunding bonds for the Pennsylvania Housing Finance Agency. Serial bonds were repriced to yield from 3.50% in 1995 to 5.55% in 2007.

Over $16 million was added in new 2006 and 2007 maturities at the repricing, and yields on the earlier maturities were lowered 5 basis points across the board.

A $71.8 million term bond in 2013 was shifted out to 2014, with yields lowered 3 basis points to 5.81%. A term bond due in 2018 was lowered from $57.2 million to $45.2 million and the yield was unchanged from the initial pricing at 5.85%. The yield on a $10 million term bond due in 2022 was lowered 10 basts points to 5.86%. The FNMA-backed issue was rated triple-A by Standard & Poor's and Moody's.

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