Technical pressure sapped the euphoria out of Friday's Fed ease, but the news gave dealers some strength to meet issuers' final year-end rush on the primary this week.

Nonfarm jobs erased recent gains, plunging 241,000 in November, the Labor Department reported. The Federal Reserve responded by easing monetary policy at midsession.

Prices jumped 1/2 point in early trading, but supply pressure brought prices back down by the end of the day. Bonds averaged gains of 1/4 point by the end of the session.

For example, in secondary trading, New Jersey Turnpike 6 1/2S of 2016 were quoted at 98 3/8-5/8 to yield 6.61% soon after the Fed ease but sank to 97 5/8-7/8 to yield 6.67% by the end of the session.

"The ease was good news, and we got some going away business done but it's still got a heavy tone to it," one trader said. "It's going to be hard for it to muster any real move from here, and it's probably reached its highs for this cycle."

The relentless onslaught of supply has forced underwriters to price deals at cheaper levels, stranding secondary bonds at higher prices. The trend is likely to continue this week, market players said.

Nevertheless, the ease increased the Street's resolve to tackle this week's large amount of new issues.

The negotiated calendar features several sizable deals, including $450 million New York Local Government Assistance Corp. revenue bonds, to be priced by Lehman Brothers; $350 million Massachusetts general obligation bonds, to be priced by Smith Barney, Harris Upham & Co.; and $250 million Texas National Research Laboratory Commission Financing Corp. lease revenue bonds, to be priced by Goldman, Sachs & Co.

The competitive sector is dominated by $426 million New Jersey general obligation bonds.

Topping the short-term note sector is $700 million Michigan general obligation cash flow notes, to be priced by First Boston Corp.

Friday's Market

Traders reported light bid-wanted activity, and only a few large blocks changed hands. Sources said $11 million Salt River Arizona 6s of 2031 traded around 6.72%.

In the debt futures market, the March contract settled 20/32 higher, to 94.14. The March MOB spread was calculated at negative 194.

In secondary dollar bond trading, Port Authority of New York and New Jersey 6 1/2s of 2021 were quoted at 95 7/8-96 to yield 6.81%. Florida Board of Education 6 3/4s of 2021 were quoted at 99 1/4-3/4 to yield 6.77%.

In the primary sector, all bids were rejected for $227 million Chicago School Finance Authority, Ill., unlimited-tax general obligation school assistance refunding bonds. The issue had been awarded to Prudential Securities on Thursday.

Financial adviser Merrill Lynch reported that, due to the lack of necessary present value savings, the issue was withdrawn from the market and will be resolt at a later date.

Market sources reported some pain from swaps done from the deal.

In other news, Denver Airport bond yields sank as much as 40 basis points Friday as rumors continued that the city and United Airlines are close to a contract agreement.

A market source said about $50 million of Denver bonds changed hands Thursday and Friday. Friday, bonds traded as cheap as 8.65% for noncallabes and were quoted late in the session at 8.25%.

In follow-through business, Goldman Sachs, senior manager for $338 million New York State Environmental Facilities Corp. state water pollution control revolving fund revenue bonds, freed the issue from syndicate restrictions.

In late secondary trading, the 6 7/8 of 2010 were quoted at 99-/4 to yield 6.94%.

In light new-issue activity, A.G. Edwards & Sons priced and re-priced $73 million Columbus, Ohio, water system revenue refunding bonds to lower yields by five basis points.

The final scale included serial bonds priced to yield from 5.05% in 1995 to 6.40% in 2005 and a 2010 term was priced to yield 6.65%.

The bonds are rated A1 by Moody's and AA-minus by Standard & Poor's.

In the short-term note sector, yields dropped five to 10 basis points on average.

In late secondary trading, Los Angeles Trans were quoted at 3.70% bid, 3.65% offered. March New York State Trans were quoted at 5.00% bid, 4.90% offered. Texas notes were quoted at 3.65% bid, 3.63% offered in late cash trading. New York City Rans were quoted at 5.00% bid, 4.95% offered.

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