Municipal bond prices picked up 1/4 to 3/8 points overall yesterday, while some aggressively priced new issues managed lure institutions off the bench.

"I guess the real story in all of this is the re-ignition of some institutional interest," said Robert W. Chamberlin, a senior vice president and supervisory municipal analyst at Dean Witter Reynolds Inc. "The overall indication just talking to the syndicate people is [the] Illinois [general obligation offering] sold well, with some indication that a lot of that is just going into stock," Chamberlin said. While Illinois might not be the best name one around, it is still a state name that dealers feel comfortable holding, he said.

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