An overhang of supply, a dearth of buyers, and lackluster economic indicators kept yield on The Bond Buyer's indexes relatively stable this week.

The yield on the 20-bond index of general obligation bonds was unchanged from last week at 5.30%. The 11-bond index dipped one basis point, to 5.19% from 5.20% last Thursday.

Meanwhile, the 30-year revenue bond index gained two basis points, to 5.53% from 5.51% last week.

The average yield to maturity of the 40 bonds used to calculate the daily Municipal Bond Index was unchanged at 5.47% from a week ago. The 40-bond index is comprised primarily of revenue bonds.

The yield on the 30-year U.S. Treasury bond finished three basis points lower than last Thursday at 6.02% from 6.05%.

As evidence of the supply overhang, The Blue List exploded. The compendium of bonds held in municipal dealers' inventories polevaulted $480 million, or 28%, to $2.21 billion from 1.72 billion. That put the list at its highest level since Oct. 28, 1991, when it reached $2.26 billion.

On the other side of the equation, The Bond Buyer's 30-day visible supply, after hitting $6.31 billion on Monday, fell to $4.51 billion on Thursday.

The negotiated component averaged $2.65 billion in September, down considerably from August's average of $3.8 billion. For the January-September period, the negotiated 30-day calendar has averaged $4.26 billion.

Earlier in the week "the market rallied, and then people tried to set new prices on new issues, and then they failed," a market strategist said of the lack of price movement.

"The high-grade calendar on Tuesday kind of took the wind out of everybody," one municipal dealer said. "Buyers have been licking their lips waiting to buy bonds at lower prices."

One dealer pointed to the weak trading performance of one of the week's largest issues, $800 million of California general obligation bonds which sold Tuesday.

When an unsold balance of approximately $400 million of the bonds hit the street, yields on the securities rose as much as 20 basis points, some market players said.

A block of approximately $75 million of the bonds traded at yields 20 basis points lower than original pricing levels, the dealer said.

In addition, bonds from a $317 million Mecklenburg, N.C. unlimited tax general obligation refunding issue were trading at yields about 10 basis points higher than original reoffered levels, traders said.

Due to a lack of cash, bond funds have been unable to take huge amounts of inventory off dealers hands.

"Basically it's sticker shock," an analyst said. "Retail sees a 4% handle and they go to the stock market."

He said that yields currently available in the intermediate sector -- were most retail buying has been concentrated -- are now in the 4% range, and buyers are balking. Crossover buyers have been supporting the market.

"You have to go out 16 to 17 years to get 5% yields on high grades," the analyst said. "Some of the wire houses say their retail business has all but dried up."

The latest economic indicators gave little support to the market, other market sources said.

Sales of new single-family houses showed a decline of 3.1% in August, the second consecutive monthly drop despite 25-year lows on mortgage rates.

"Housing starts were weaker, but that didn't do anything to help the market," a dealer said. He pointed out that the market discounted news attributing the slump in construction in part to flooding in the midwest, saying, "if it wasn't that, it would have been something else."

The Bond Buyer's one-year note index declined 18 basis points this week, to 2.74% from 2.92% last Wednesday.

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