The municipal market was slightly weaker yesterday, following Treasuries.

"We're probably not off more than a basis point or two," a trader in New Jersey said. "It just feels worse because there's a lot of people on vacation, so there are not many bids."

"I think apathy rules the roost," a trader in Chicago added. "I feel people just want to wind things up ahead of the holiday weekend. The secondary market is at a bit of a standstill."

The Treasury market showed some losses yesterday. The yield on the benchmark 10-year Treasury note, which opened at 3.78%, finished at 3.79%. The yield on the two-year note was quoted near the end of the session at 2.34% after opening at 2.33%. The yield on the 30-year Treasury finished at 4.41% after opening at 4.40%.

"There's a lot of noise, but not a lot of action," a trader in Los Angeles said. "There's a lot of bid-wanteds. I think after the close, people are really going to start winding down for the weekend."

In the new-issue market yesterday, Banc of America Securities LLC priced for retail investors $348.8 million of Charlotte, N.C., water and sewer system revenue bonds. The bonds mature from 2010 through 2028, with term bonds in 2033 and 2038. Yields range from 2.03% with a 3.5% coupon in 2010 to 4.70% priced at par in 2033. Bonds maturing in 2022 and 2023, from 2025 through 2028, and in 2038 were not offered during the retail order period. The bonds, which are callable at par in 2018, are rated Aa1 by Moody's Investors Service and AAA by Standard & Poor's and Fitch Ratings.

California's Palo Alto Unified School District competitively sold $289.2 million of general obligation bonds to Lehman Brothers at a true interest cost of 5.16%. Pricing information on the deal was not available by press time. The bonds were priced in two series. Bonds from the $10.6 million Series 1 were scheduled to mature from 2010 through 2014. Bonds from the $278.6 million Series 2 were scheduled to mature from 2015 through 2033. None of the bonds are callable. The credit is rated Aa2 by Moody's and AAA by Standard & Poor's.

Goldman, Sachs & Co. priced $154.1 million of revenue bonds for the Illinois Finance Authority. The bonds mature from 2010 through 2023, with term bonds in 2028, 2033, and 2038. Yields range from 2.90% with a 4% coupon in 2010 to 5.75% with a 5.5% coupon in 2038. The bonds, which are callable par in 2018, are rated Aa3 by Moody's and AA-minus by Standard & Poor's.

Goldman Sachs also priced $123.1 million of revenue refunding bonds for New York's Empire State Development Corp. The bonds mature in 2009, and from 2017 through 2030, with yields ranging from 3.81% with a 3.75% coupon in 2017 to 4.87% with a 4.75% coupon in 2030. Bonds maturing in 2009 were decided via sealed bid. The bonds, which are callable at par in 2018, are rated AA-minus by Standard & Poor's and A-plus by Fitch.

Goldman Sachs also priced $66 million of certificates of participation for the Modesto Irrigation District in California. The bonds mature from 2026 through 2028, with a term bond in 2035. Yields range from 4.93% with a 5% coupon in 2026 to 5.25% with a 5.5% coupon in 2035. The bonds, which are callable at par in 2018, are rated A-plus by Standard & Poor's and Fitch.

Estrada, Hinojosa & Co. priced $37.9 million of unlimited-tax school building bonds for Texas' San Benito Consolidated Independent School District in two series. Bonds from the $36.4 million of current interest bonds mature from 2011 through 2028, with term bonds in 2033 and 2038. Yields range from 2.53% with a 3% coupon in 2011 to 5.10% with a 5% coupon in 2038. The bonds are callable at par in 2018. The deal also contains a $1.4 million series of capital appreciation bonds. All bonds are backed by the state's triple-A rated Permanent School Fund guarantee program. The underlying credit is rated A by Standard & Poor's and A-minus by Fitch.

In economic data released yesterday, the consumer confidence index increased in August, rising to 56.9 from an unrevised 51.9 last month. Economists polled by IFR Markets predicted the index would rise to 53.0.

New home sales came in at 515,000 in July, after a revised 503,000 the previous month. Economists polled by IFR had predicted 525,000 new home sales.

More economic data will be released later this week, starting today with the July durable goods report. Tomorrow, initial jobless claims for the week ended Aug. 23, continuing jobless claims for the week ended Aug. 16, and preliminary second quarter gross domestic product are due. Personal income and consumption for July will be released on Friday, along with the core personal consumption expenditures deflator, the August Chicago purchasing managers index, and the final August University of Michigan consumer sentiment index.

Economists polled by IFR are predicting a 0.1% uptick in durable good orders, a 0.3% dip in durable goods orders excluding transportation, 427,000 initial jobless claims, 3.400 million continuing jobless claims, 2.7% annual growth rate for GDP, a 0.1% decline in personal income, a 0.2% increase in personal consumption, a 0.3% rise to the core PCE deflator, a 49.8 Chicago PMI reading, and a 62.0 reading for the Michigan sentiment index.

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