Bullish sentiment following Friday's easing of monetary policy carried over into yesteday's session, and prices advanced 3/8 point on average in moderate preholiday trading.

The market opened with a firm tone, and traders reported light activity during the morning session with prices up about 1/4 point. Prices got an extra boost from personal income data, which fell 0.1% in November -- the first decrease since July -- while spending surged 0.7%.

Trading was subdued in the afternoon session, but cash finished 1/4 to 3/8 point higher, with some bonds 1/2 point higher in spots. In the debt futures market, the March municipal contract settled up 17/32, to 96.30.

Primary activity has trickled to a halt ahead of the holiday as The Bond Buyer's 30-day visible supply totaled $889 million. Standard & Poor's Corp.'s The Blue List of dealer inventory slipped $2 million, to $96 million.

In very light dealings yesterday, Merrill Lynch & Co. as senior manager received the formal award on $350 million South Carolina Public Service Authority revenue for the Santee Cooper project.

The offering included serial bonds priced to yield from 5.35% in 1997 to 6% in 2002. A 2006 term was priced to yield 6.40%, a 2014 term was priced to yield 6.553%, a 2024 term was priced to yield 6.603%, and a 2031 term was priced to yield 6.70%.

The bonds are rated A1 by Moody's Investors Service, and A-plus by Standard & Poor's and Fitch Investors Service, except for the 2014 and 2024 terms, which are insured by AMBAC Indemnity Corp. and triple-A rated.

In secondary-market trading, participants reported a steady but light stream of business during the morning session, with most business done on the upside. There were no reports of widespread profit taking, and most traders were content to wind down the session with an eye for an early close today ahead of the Christmas holiday.

In secondary dollar bond trading, Denver Airport 7 3/4 of 2021 slipped 1/4 point on news that United Airline investors raised questions about the Denver Airport project costs. The bonds were quoted at 98 1/4-3/4 to yield 7.86% in late trading yesterday.

Other dollar bonds were quoted up 1/4 to 3/8 point on average. Port Authority of New York and New Jersey 6 1/2s of 2021 were quoted at 97 3/4-98 1/2 to yield 6.61%, and Pennsylvania Turnpike 6 1/2s of 2013 were quoted at 98 1/4-3/8 to yield 6.54%.

In the short-term sector, trading was very thin and yields faded slightly as a result.

In late secondary-market trading, Los Angeles Trans and Texas Trans were quoted at 3.05% bid, 3% offered. New York State Trans were quoted at 4.15% bid, 4.10% offered.

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