Markets

The Bond Buyer's weekly yield indexes mostly declined this week, as Treasury market gains carried municipals to a decidedly positive string of sessions.

For the second week in a row, tax-exempt money market funds saw outflows - albeit slightly less than last week - as they closed the books on October and digested a 50 basis point interest rate cut by the Federal Open Market Committee.

Goldman Sachs Asset Management LP plans to launch a new municipal closed-end fund as part of its existing lineup of tax-exempt mutual funds, according to an Oct. 24 registration with the Securities and Exchange Commission. The addition, which is to be called the Goldman Sachs Municipal Opportunity Fund, will bring the firm's number of tax-free mutual funds to six.

As a result of the credit crisis, Valley Forge, Pa.-based Vanguard Group yesterday said it will merge its $3.2 billion Vanguard Insured Long-Term Tax-Exempt Fund into its $2.8 billion Vanguard Long-Term Tax-Exempt Fund effective Dec. 12, 2008.

Weekly reporting municipal bond mutual funds had a net outflow of $134 million during the period ending Oct. 29, AMG Data Services reported.

The municipal market will see a slight decline in new-issue volume this week as some issues remain postponed due to unsettled market conditions, and as some issuers await the Election Day outcome of an estimated $66 billion of bond referendums before proceeding with their deals.

WASHINGTON - Disruption in the short-term market, failed remarketings of variable-rate bonds, and the credit deterioration of counterparties, combined with the U.S. housing market's woes, pose challenges in the coming months for state housing finance agencies, Moody's Investors Service said in a report released Friday.

While taxable money market funds are still seeing healthy inflows, tax-exempt funds suffered outflows of $1.96 billion for the week ending Oct. 27 - a stark comparison to last week's inflows of $7 billion and the gains of the last three weeks in general, according to the Money Fund Report, a service of iMoneyNet.com of Westborough, Mass.

As the government weighs bold steps to aid homeowners facing foreclosure, new data shows how big the problem has become.

Most of The Bond Buyer's weekly yield indexes increased this week, as last week's rally ebbed Monday and was followed by several mostly weaker sessions.