The municipal market was slightly firmer yesterday as the nation voted to elect the next president.

Traders said tax-exempt yields finished lower by one to three basis points after Treasuries firmed up late in the session. Earlier, municipals had little direction and were largely unchanged.

"There wasn't a whole lot going on for probably three-quarters of this day, but then we had that Treasury uptick, and we followed suit a little bit," a trader in New York said. "There was a decent amount of activity in the secondary market the latter half of the day, and we ended up seeing some gains out there. Still, though, it was mostly quiet."

"I think most of us expected a quieter day, given that it's Election Day, and we got that for most of the day," a trader in Los Angeles said. "But we saw a pickup towards the end, when Treasuries got their bump. They were a tiny bit better all day, Treasuries, but then the gains widened later on, and it pushed us from that unchanged, tiny-bit-better territory to a good two or three basis points better in spots. It's a good thing, because there was literally nothing going on for a lot of this day."

Trades reported by the Municipal Securities Rulemaking Board yesterday showed gains. A dealer sold to a customer California 5.25s of 2028 at 5.81%, three basis points lower than where they were sold Monday. Bonds from an interdealer trade of New York City 5.25s of 2028 yielded 5.46%, three basis points lower than where they traded Monday. A dealer bought from a customer Illinois 5s of 2026 at 5.23%, down two basis points from where they traded Monday.

A dealer sold to a customer North Carolina 3s of 2027 at 5.17%, down two basis points from where they traded Monday. A dealer sold to a customer University of California 5s of 2038 at 5.77%, one basis point lower than where they were sold Monday. A dealer sold to a customer New York State Dormitory Authority 5s of 2038 at 5.48%, down two basis points from where they traded Monday.

The Treasury market showed gains yesterday. The yield on the benchmark 10-year note, which opened at 3.91%, was quoted near the end of the session at 3.75%. The yield on the two-year note was quoted near the end of the session at 1.38% after opening at 1.43%. The yield on the 30-year bond, which opened at 4.33%, was quoted near the end of the session at 4.20%.

In economic data released yesterday, new factory orders for manufactured goods slumped 2.5% in September. The decrease to $431.989 billion was larger than the 0.7% decrease projected by Thomson Reuters and came after a revised 4.3% decrease to $443.200 billion in August.

Excluding transportation, the level of all new manufacturing orders fell 3.3% to about $376.7 billion in September following a revised 3.6% drop in August to $391.3 billion.

In the new-issue market yesterday, Merrill Lynch & Co. priced $201.2 million of University of Pennsylvania health system revenue bonds for the Pennsylvania Higher Educational Facilities Authority. The bonds mature in 2013, 2018, 2022, and 2026, yielding 5.00% priced at par in 2013 and 5.65% with a 5.5% coupon in 2018. Bonds maturing in 2022 and 2026 were not formally re-offered. The bonds, which are callable at par in 2018, are rated Aa3 by Moody's Investors Service and AA-minus by Standard & Poor's.

In other new-issue market activity, the San Ramon Valley, Calif., Unified School District competitively sold $25 million of tax and revenue anticipation notes to JPMorgan with a true interest cost of 1.33%. The notes mature in November 2009, yielding 3.25% priced at par. The credit is rated SP-1-plus by Standard & Poor's.

Olathe, Kan., competitively sold $15 million of general obligation temporary notes to UMB Bank NA with a net interest cost of 2.59%. The notes mature in December 2009, yielding 2.20%, priced at par. The credit is rated MIG-1 by Moody's and SP-1-plus by Standard & Poor's.

Ulster County, N.Y., competitively sold $11.6 million of bond anticipation notes to Depfa First Albany Securities LLC with a NIC of 1.91%. The Bans mature in November 2009, yielding 2.50% priced at par. The credit is rated AA-minus by Standard & Poor's.

JPMorgan priced $11.3 million of revenue refunding bonds for Albuquerque. The bonds mature from 2009 through 2023, with term bonds in 2026 and 2030. Yields range from 1.70% with a 4% coupon in 2009 to 5.49% with a 5.375% coupon in 2030. The bonds, which are callable at par in 2018, are rated Aa3 by Moody's, AAA by Standard & Poor's, and AA by Fitch Ratings.

Ozaukee County, Wis.. competitively sold $10 million of GOs to Piper Jaffray & Co. with a TIC of 4.32%. The bonds mature from 2012 through 2028, with yields ranging from 4.10% with a 4% coupon in 2019 to 4.55% with a 4.5% coupon in 2028. The bonds, which are callable at par in 2018, are rated Aa1 by Moody's.

Despite the mostly light new-issue calendar yesterday, the primary market is expected to see a pickup in activity today. JPMorgan is set to price $350 million of assessment bonds for the Massachusetts Bay Transportation Authority, Merrill Lynch is slated to bring $300 million of revenue bonds for New York's Empire State Development Corp., and the Colorado Health Facilities Authority will sell $210 million of revenue bonds to be priced by JPMorgan. Today's competitive calendar, however, is very light, with no deals scheduled in excess of $20 million.

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