Pricing of new deals started early Tuesday as underwriters sold bonds that were attractively priced, pulling the secondary market weaker along with it.

The overall market traded weaker with the cheap deals in the primary market leading the way. "It's a self-fulfilling prophecy in a way," a New York trader said. "The new issues are being priced so cheaply that yields are getting pulled that way naturally in the secondary."

In the primary market Tuesday, JPMorgan held a second retail order period for $513 million New York City general obligation bonds in two pricings. The bonds are rated Aa2 by Moody's Investors Service and AA by Standard & Poor's and Fitch Ratings.

Yields on the first pricing of $375 million ranged from 0.99% with a 3% coupon in 2016 to 4.77% with a 4.625% coupon in 2039. The bonds are callable at par in 2023. Bonds maturing in 2015 were offered via sealed bid. Bonds maturing in 2026, between 2031 and 2034, in 2036, and 2037 were not offered for retail. Yields were unchanged from Monday's retail order period.

Yields on the second pricing of $138 million ranged from 0.99% with 2% and 4% coupons in a split 2016 maturity to 2.72% with 4% and 5% coupons in a split 2021 maturity. Bonds maturing in 2014 were offered via sealed bid. Yields were unchanged from Monday's retail order period.

Bank of America Merrill Lynch held preliminary pricing for $197.2 million of Kansas City, Mo., general improvement airport refunding revenue bonds, rated A2 by Moody's and A-plus by Standard & Poor's.

Yields on the first series of $145 million, subject to the alternative minimum tax, ranged from 0.70% with a 2% coupon in 2013 to 4.60% with a 5.25% coupon in 2027. The bonds are callable at par in 2021.

Yields on the second series of $52.1 million ranged from 0.83% with a 4% coupon in 2015 to 2.40% with a 5% coupon in 2019. Traders said there were $200 million of orders for the second series. "It's a blowout," the New York trader said. "They are cheap. The 2019 maturity is 80 basis points off the triple-A scale and 28 basis points off the single-A scale."

JPMorgan priced for retail $164.3 million of Florida's Jacksonville Electric Authority water and sewer system revenue bonds, rated Aa2 by Moody's and AA by Standard & Poor's and Fitch.

The first series of $92.1 million were not offered for retail. Yields on the second series of $72.2 million ranged from 0.73% with a 3% coupon in 2015 to 4.38% with a 4.25% coupon in 2027. Bonds maturing in 2014 were offered via sealed bid. The bonds are callable at par in 2019.

In the competitive market, Harris County, Texas, is expected to auction $295 million of short-term notes, rated F-1-plus by Fitch.

Monday, yields on the Municipal Market Data scale were mostly steady to one basis point weaker. The 30-year yield rose one basis point to 4.15%. The 10-year was flat at 2.67% for the second session and the two-year finished steady at 0.43% for the fourth consecutive session.

Yields on the Municipal Market Advisors scale also ended steady to weaker Monday. The 10-year and 30-year yields rose one basis point each to 2.85% and 4.22%, respectively. The two-year was steady at 0.53% for the fourth session.

Treasuries were weaker Tuesday morning. The benchmark 10-year yield rose four basis points to 2.53% and the 30-year yield climbed five basis points to 3.60%. The two-year yield increased two basis points to 0.32%.

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