Last Friday's losses carrie over into the market yesterday and municipal prices were mostly lower in stagnant activity as supply and a confused economic picture continue to hold the market at bay.
Prices fell as much as 1/4 on some names, but short-covering boosted some prices 1/8 point. Traders said that the market is reluctant to make any real moves after last Friday's plunge on stronger-than-expected May jobs data.
Instead, traders will concentrate on new issues, and wait until Thursday's inflation numbers for more clues to the economy's health. Secondary prices are likely to track the government sector until then.
New-issue activity was light yesterday and traders said that investors showed some reluctance to take on bonds. A group including Merrill Lynch & Co. as senior manager tentatively priced $159.7 million University of Indiana Trustees student fee bonds.
The offering included serials tentatively priced to yield from 5.30% in 1993 to 6.60% in 2001. A 2004 term, containing $50 million of the loan, is tentatively priced as 6.80s to yield 6.886%.
The offering also included zero coupon bonds tentatively priced to yield from 7.10% in 2005 to 7.25% in 2009.
The offering is rated Al by Moody's Investors Service and AA-minus by Standard & Poor's Corp. except for the zero coupon bonds, which are insured by AMBAC Indemnity Corp., and triple-A rated by both Moody's and Standard & Poor's.
A group including William R. Hough as senior manager tentatively priced and then repriced $93.5 million Charlotte Co., Fla., utility system revenue bonds to raise yields five to 10 basis points on the 1196-2002 maturities, and three to five basis points for the terms.
The final terms included serials priced to yield from 4.75% in 1992 to 6.60% in 2002.
A 2005 term maturity is priced to yield 6.859%, a 2009 term is priced to yield 7%, a 2014 term at 7.065%, a 2015 term at 7.05%, a 2019 term at 7.09%, and a 2021 term at 7.04%.
The bonds are insured by the Financial Guaranty Insurance Co. and rated triple-A by both Moody's and Standard & Poor's.
Merrill Lynch & Co. as senior manager tentatively priced $51.3 million Boston Water and Sewer Commission general revenue bonds.
The offering included serials tentatively priced to yield 5% in 1992 to 7% in 2006.
A 2011 term is tentatively priced as 7s to yield 7.10%, while a 2021 term, containing $29 million of the loan, is tentatively prices as 7s to yield 7.15%. term, containing $29 million of the loan, is tentatively priced as 7s to yield 7.15%.
The 1997-2021 bonds are FGIC-insured and rated triple-A by Moody's, Standard & Poor's, and Fitch Investors Service.
Secondary trading was listless as market players are reluctant to put product out for the bid. Bid-wanted activity was light, and much did not trade.
Goldman, Sachs & Co. as senior manager released $675 million New York City general obligation bonds from syndicate restrictions. Traders said that there were few bonds in the Street, but yields on some long bonds were quoted at 8.50%, five basis points lower in yield than the original net.
"If you have to go bid wanted you're not going to like what you get," a trader said. "The accounts with money are taking advantage of the situation and it feels pretty lousy. The Street is still long."
The 30-day visible supply climbed back over the $3-billion mark yesterday, ringing in at $3.53 billion, up $720 million from Friday and up $60 million from last Monday. Standard & Poor's Corp.'s The Blue List totaled $1.6 billion, down a scant $7.9 million from Friday.
In follow-through business, Merrill Lynch, senior manager for $68 million San Francisco, Calif., unlimited tax various purpose bonds, reported an unsold balance of $7.8 million.
In the short-term note sector, California names backed up as over $40 million came out for the bid. The notes opened bid at 4.50%, but yields rose as supply hit the secondary. California notes were quoted at the end of cash at 4.85% bid, 4.75% offered.
Meanwhile, New York State Trans sank in price, but held in better than the California sector, despite the state's ongoing budget problems. The notes were quoted at the end of cash at 4.10% bid, 4% offered.
In the prerefunded sector, traders quoted prerefunded bonds with a 1995 call at 5.88% bid, 5.80% offered.