Profit takers helped push some dollar bonds 1/4 point lower yesterday, while $550 million Massachusetts Bay Transportation Authority bonds grabbed the primary market spotlight.

"We saw a fair amount of customer bid [list] in the morning, which kind of put a damper on the market," one trader said. He judged dollar bonds to be off roughly 1/4 point.

The trader said that participants appeared to be taking some profits ahead of the inflation news to be delivered by today's May producer price index report.

A municipal analyst, however, pegged dollar bonds as unchanged overall, with more actively traded issues down 1/4 point. High-grade issues ended unchanged to slightly better, he said.

Activity was moderate in the morning, but had tapered off by afternoon, the analyst said.

In debt futures the September municipal contract ended down 11/32 to 92 22/32s. Yesterday's September MOB spread was negative 388 compared to negative 372 on Wednesday.

The analyst agreed that participants may have considered yesterday a good time to take profits in view of the 25-basis-point improvement the municipal market has witnessed in the past eight days or so, and the uncertainty surrounding today's PPI report.

Expectations call for the PPI to show moderate increases of 0.2% overall and 0.3% in the core rate, which excludes food and energy.

The trader also said some mutual funds appeared to be lightening up yesterday on New York paper to make room for new supply after the state passed its budget on Wednesday. He estimated that roughly $50 million of New York paper was out for the bid.

Turning to the primary market, Wesley G. Wallace Jr., Massachusetts Bay Transportation Authority's treasurer and controller, said yesterday $550 million offering through senior manager Lehman Brothers "went very well."

"The market was off from yesterday's close, but we basically achieved expected savings targets," he said.

The Authority's general transportation system bonds consisted of $350 million of refunding bonds and $200 million of new money.

"We feel we got the deal done at a good price in a tough market," an under writing source familiar with offering said, adding that the account was closed.

Asked whether he planned to purchase the bonds, Guy Wickwire, portfolio manager of the $1 billion Fidelity Massachusetts Tax-Free Bond Fund, replied "not today."

The market is likely to see a 3/4-point shift either may depending on whether the number brings good or bad inflation news to the bond market, Wickwire said.

"I'd just as soon wait on MBTA," said Wickwire, whose fund is the largest Massachusetts-specific fund in the nation. Wickwire said he would rather pay up a little for the bonds later than buy now and watch an unfavorable number erode value from his purchase.

The $350 million refunding piece of MBTA's offering contained serial bonds priced to yield from 4.15% in 1996 to 5.85% in 2012. A 2014 term, containing $20.9 million, was priced to yield 5.90%. A 2019 term, containing $8 million, was priced to yield 5.984%. At the repricing, the yield of the 2007 maturity was lowered by five basis points.

The 2019 maturity was switched to from a discount to a premium bond, and the yield was lowered by about eight basis points.

The deal's $200 million new money portion consisted of serial bonds priced to yield from 3.45% in 1995 to 5.95% in 2012. A 2014 term, containing $14.9 million, was priced to yield 6%. A 2019 term, containing $46 million, was priced to yield 6.071%, and a 2024 term, containing $59 million, was priced to yield 6.125%. Moody's Investors Service is expected to rate the offering A, while the expected Standard & Poor's Corp. rating is A-plus.

Wickwire agreed that Massachusetts paper has been in scant supply lately, but added that the $300 million Massachusetts special obligation revenue bond offering earlier this week helped to alleviate some the market's hunger.

The portfolio manager said he originally put in for the offering, which at its preliminary pricing was "wildly oversubscribed."

But at the repricing, when yields were cut by roughly 10 basis points in most cases, and by 15 basis points on the longest maturity, Wickwire said that he, like many others dropped out.

At least two other big offerings are expected next week. Lehman Brothers is expected to bring $500 million Metro Washington Airport Authority, D.C., revenue bond deal, while Smith Barney will serve as senior manager for $419 million New York City Industrial Development Authority bonds.

In other news, Standard & Poor's Corp.'s The Blue List declined $55 million yesterday, to $1.41 billion. Since June 1, the measure of dealer inventory has dropped $322 million.

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