Markets

Municipal bond mutual funds saw a second straight week of inflows, and a sixth week out of seven.

Coming off three weeks of price losses, municipal bonds staged a decent rally this week despite a jump in supply and weakness in Treasuries.

Super downgrades remain rare events, but they reflect a more aggressive posture by the rating agencies, market observers say.

After recouping recent losses and ending a five-week trend of outflows, tax-exempt money market funds lost $2.50 billion for the week ended Oct. 17, as total net assets dropped to $288.10 billion, according to the Money Fund Report, a service of iMoneyNet.com.

Proposals to limit the tax-exemption on municipal bonds get short shrift from the majority of market participants, but some state and local government experts on Tuesday seemed resigned to the notion that tax-reform efforts will inevitably do just that.

Market participants are still grappling with the pros and cons of the growing direct purchase sector for tax-exempt bonds.

CHICAGO - A weak real estate market continues to plague the long-troubled senior living sector, though providers have enjoyed some stabilization in the last year, Standard & Poor's said in a new report.

For all the talk of credit issues driving the municipal bond market this year, only a minority of participants actually cite it as a top determinant.

Though municipal yields are rising across the curve from September's record lows, issuers are bringing more debt to market. A total of $6.68 billion is expected in the primary this week, up from last week's revised $4.49 billion.