Markets

While Central Falls, RI, and Pittsburgh see light at the end of their tunnels, other tales of municipal distress from Harrisburg to California are much messier.

Medicaid and Medicare funding cuts under the new federal health care law could force states to choose whether to compensate hospitals with their own dollars or let hospitals' credit quality decline, Moody's said.

Municipal bond mutual funds saw outflows for a second straight week, at $133 million, as the market absorbed a large calendar with concessions.

Tax-exempt money market funds lost $2.17 billion and total net assets settled at $276.62 billion in the week ended March 11.

Some market participants believe the recent outflows from municipal bond mutual funds could be a sign of the "great muni rotation," while others believe such a rotation is unlikely to occur anytime soon.

The municipal bond market is weakening by slow accretion. A second day of California GOs and Empire State Development Corporation paper have kept market participants busy and pushed up yields incrementally

The municipal market started Wednesday morning slightly weaker in tone as dealers worked to unload some of their balances.

Just because the household sector saw a material decline in its holdings at year end, it didn't mean the retail crowd snubbed its nose at municipal securities altogether — it just shifted its access to the debt.

Six weeks after pulling its last bond sale, Illinois plans a full court press with investors and will drop a bidding feature that had dampened the interest of some broker-dealers as it prepares to competitively sell $800 million of debt.