Following Lehman Brothers Holdings Inc. filing for Chapter 11 bankruptcy protection, and Bank of America's purchase of Merrill Lynch & Co., the municipal market was mixed yesterday, despite the Treasury market showing steep gains in a flight-to-quality bid and tumbling stocks.

"This is a bellwether day, and not in a positive sense," said Richard Ciccarone, a managing director and chief research officer at McDonnell Investment Management LLC. "It opens the door for more problems that might be underneath the surface. And over the years, the financial markets have intertwined themselves with so many new debt instruments that a single failure has implications for many companies, so that seems to have become more intense in recent years."

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.