The municipal market was slightly firmer yesterday, lagging behind a sizeable rally in the Treasury market.

"We are definitely a bit firmer, but not quite in line with what we're seeing across the board in Treasuries," a trader in New York said. "You are seeing significant gains in Treasuries, but tax-exempts are maybe better a basis point or two."

"Munis had another better day, but it was pretty muted, our rally, in relation to the gains you saw in the Treasury market," a trader in Los Angeles added. "Maybe two basis points for munis, but we lagged Treasuries for sure."

The Treasury market showed sizeable gains yesterday as stocks tanked. The yield on the benchmark 10-year Treasury note, which opened at 3.32%, finished at 3.09%. The yield on the two-year note was quoted near the end of the session at 0.98% after opening at 1.06%. The yield on the 30-year bond, which opened at 3.91%, was quoted near the end of the session at 3.63%.

In the new-issue market yesterday, RBC Capital Markets priced $306.9 million of water and sewer system revenue refunding bonds for Miami-Dade County. The bonds mature from 2009 through 2025, with yields ranging from 1.65% with a 4% coupon in 2009 to 5.92% with a 5.5% coupon. Bonds maturing in 2009, 2012, 2014 through 2018, 2021, and 2023 through 2025 are insured by Berkshire Hathaway Assurance Corp. All remaining bonds are uninsured. The bonds are callable at par in 2018. The underlying credit is rated A1 by Moody's Investors Service and A-plus by Standard & Poor's and Fitch Ratings.

JPMorgan priced $173 million of revenue bonds for the California Department of Water Resources in two series. Bonds from the $98 million Series G-4 have split maturities in 2016, which yield 4.375% priced at par, 4.375% with a 4.75% coupon, and 4.375% with a 5% coupon. Bonds from the $75 million Series G-11 have split maturities in 2018, which yield 4.75% priced at par, 4.75% with a 4.875% coupon, and 4.75% with a 5% coupon. None of the bonds are callable. The credit is rated Aa3 by Moody's and A-plus by Standard & Poor's and Fitch.

The Delaware Transportation Authority competitively sold $117.9 million of senior revenue bonds to Barclays Capital with a true interest cost of 4.72%. The bonds mature from 2010 through 2027, with a term bond in 2029. Yields range from 2.94% with a 4% coupon in 2013 to 5.20% with a 5% coupon in 2029. Bonds maturing from 2010 through 2012, in 2014, 2018, and from 2020 through 2023 were not formally re-offered. The bonds, which are callable at par in 2019, are rated Aa3 by Moody's and AA-plus by Standard & Poor's.

RBC priced $28.6 million of unlimited-tax bonds for Texas' Bryan Independent School District. The bonds mature from 2014 through 2028, with yields ranging from 3.20% with a 4% coupon in 2014 to 5.11% with a 5% coupon in 2028. The bonds, which are backed by the Permanent School Fund guarantee program, are callable at par in 2018. The underlying credit is rated A-plus by Standard & Poor's and AA-minus by Fitch.

Wachovia Bank NA priced $27.6 million of revenue anticipation certificates for Georgia's Carrollton Payroll Development Authority. The bonds mature from 2015 through 2026, with term bonds in 2035 and 2039. Yields range from 4.00% priced at par in 2015 to 6.40% with a 6% coupon in 2039. All bonds, except those maturing in 2039, are insured by Assured Guaranty Corp. The remaining bonds are uninsured. The bonds are callable at par in 2018. The underlying credit is rated A1 by Moody's.

In economic data released yesterday, initial jobless claims for the week ended Nov. 15 came in at 542,000, after a revised 515,000 the previous week. Economists polled by Thomson Reuters had predicted 505,000 initial jobless claims.

Continuing jobless claims for the week ended Nov. 8 came in at 4.012 million, after a revised 3.903 million the prior week. Economists polled by Thomson had predicted 3.920 million continuing jobless claims.

The composite index of leading economic indicators fell 0.8% in October. LEI increased a revised 0.1% in September, and stands at 99.6. Economists polled by Thomson predicted LEI would be off 0.6% in the month.

Manufacturing activity in the Federal Reserve Bank of Philadelphia's region "continued to deteriorate" in November, as the general business conditions index decreased to negative 39.3 in November from negative 37.5 in October. Economists surveyed by Thomson predicted a reading of negative 35.0 for the index.

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