Tax-exempts reversed an early price drop to post some modest gains yesterday as traders shook off the holiday doldrums.

The market opened weaker as traders gave back gains made last week, continuing Monday's sleepy post-holiday slide. The bid side for bonds weakened, and by mid-morning prices were quoted down 1/4 to 3/8 point in spots.

Traders said selling pressure increased even more when prices neared the bottom of the morning's trading range as the market appeared poised for greater losses.

But tax-exempts were saved when the government market lurched higher in light trading. Municipal sellers then turned buyers, eager to run prices as high as possible and hoping to take maximum profits when the market reached the top of its range.

By session's end, prices were quoted unchanged to 1/8 to 1/4 point higher on the day.

In the debt futures market, the March municipal contract settled off its highs up 3/32, to 97.00.

Market strength was sufficient for players to ignore the Conference Board's consumer confidence index. which jumped to 78.3 in December from 65.5 in November.

The market also disregarded a 5.8% gain in November new-home sales.

Trading activity increased after several successive comatose sessions. Some traders reported moderate action, including $8 million of New York State Local Government Assistance Corp. 6 1/4s of 2021, which were said to have traded slightly cheaper than 6.45% net. Another trader said $4 million of New Jersey GO 6s of 2010 were said to have changed hands around 6.07%.

Reflecting, increased secondary business, The Blue List of dealer inventory fell $20.2 million, to $1.68 billion.

In secondary dollar bond trading, prices were quoted unchanged to up 1/4 point.

Late in the day, New York State Dormitory Authority 6s of 2022 were quoted at 93 1/4-1/2 to yield 6.50%, New Jersey GO 6s of 2010 were quoted at 99-bid to yield 6.09%, and Triborough Bridge and Tunnel Authority 6 1/8s of 2021 were quoted at 99 1/4-1/2 to yield 6.18%.

Metropolitan Pier and Exposition Authority 6 1/2s of 2027 were quoted at 99 5/8-3/4 to yield 6.52%, Massachusetts Bay Transportation Authority 6s of 2012 were quoted at 961/2-97 to yield 6.3 1 %, and Georgia MEAG FGIC 6 1/8s of 2019 were quoted at 99-bid to yield 6.20%.

In short-term note trading, yields were quoted down five to as much as 15 basis points on the day.

In late trading, notes of Los Angeles and New Jersey were quoted at 2.05% bid, 1.95% offered, while Pennsylvania notes were quoted at 2.10% bid, 2% offered. Texas tax and revenue anticipation notes were quoted at 2.15% bid, 2.05% offered; Wisconsin notes were quoted at 2.10% bid, 2% offered; and California notes were quoted at 2.28% bid, 2.20% offered.

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