The Columbus Day holiday stifled activity yesterday, and new issues are likely to generate most of the activity for the rest of the week.

Traders reported prices mostly unchanged with a firm tone, but activity was listless in the morning and died out near noon, eastern daylight time. There were a few bid lists in the secondary market and some odd-lot blocks changed hands, traders said, but the market barely moved.

In the debt futures market, the contract moved as low as down 7/32, but the December contract settled down only 2/32, to 94.27.

In secondary dollar bond activity, prices were unchanged in very light dealings.

East Bay California 6 1/2s of 2016 were quoted at 99.99 1/4 to yield about 6.5%. New York City Water Authority 7s of 2015 were quoted at 99-99 1/4 to yield 7.06%, while Triborough Bridge and Tunnel Authority insured 6 5/8S were quoted at 99-1/4 to yield 6.68%.

In short-term note trading, Los Angeles notes were quoted at 4.15% bid, 4.10% offered, while March New York State tax and revenue anticipation notes were quoted at 4.80% bid, 4.75% offered. Texas notes were quoted at 4.20% bid, 4.15% offered, and Pennsylvania paper was quoted at 4.23% bid, 4.20% offered.

In light new-issue activity in the long-term primary sector, Lehman Brothers as senior manager tentatively priced $10 million of Vermont general obligation Series B bonds.

The offering included serials tentatively priced to yield from 5.45% in 1996 to 6.60% in 2011.

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

In follow-through business, Goldman, Sachs & Co., senior manager for $120 million of Maryland general obligation bonds, reported an unsold balance of $61 million early yesterday afternoon.

The market remains firm after positive economic data on Friday, and market participants said they expect interest rates to continue to move lower.

"The sell-off last week created a nice buy opportunity, and now we wait for the Fed to ease," said James L. Kochan, head of fixed-income research at Robert W. Baird & Co. "Issuance should pick up as rates head lower, but it won't be a problem for the market because demand remains very strong."

Retail investors have been moving steadily out on the curve as rates on other instruments move lower than average municipal yields. The trend is expected to continue, but some market observers note the heavy reliance on yield curve arbitrage remains a concern for the market.

"When short-term rates move higher, that source of demand will be turned off, and the market may be hard-pressed to replace it in an environment of heavier new-issue supply," noted George D. Friedlander, managing director of portfolio strategy at Smith Barney, Harris Upham & Co. "Even if we do not experience the type of panic selling that occurred in 1987, the heavy reliance on small investors moving out of short-term instruments is a major concern."

Looking ahead to supply, the 30-day visible supply totals $2.8 billion, while Standard & Poor's Corp.'s The Blue List of dealer inventory slipped $59 million, to $1.8 billion.

The negotiated sector features $400 million of North Carolina Eastern Municipal Power Agency power system revenue refunding bonds, to be priced by Smith Barney; $230 million of Georgia Municipal Power Authority power revenue refunding bonds, to be priced by First Boston; and $116 million of Sacremento Municipal Utility District, Calif., electric revenue refunding bonds, to be priced by Goldman Sachs.

In secondary-market trading yesterday, there were $3 million of North Carolina Eastern 6 1/2S of 2024 offered right around 6.70%. Traders reported $3 million of Georgia MEAGs offered around 6.65% on the long end, and there were $3 million of SACMUD certificates of participation offered around 6.60%, but traders noted there were insured bonds to be had around 6.55%.

The competitive sector is devoid of sizable issues and features $80 million of Clark Co., Nev., flood control limited-tax bonds and $82 million of Metropolitan Seattle refunding limited-tax bonds.

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