A dramatic plunge in yields yesterday continued a two-day surge as the municipal market roared back to life with a staggering rally that saw huge demand for bonds in both retail and institutional sectors.

The Bond Buyer 40 Municipal Bond Index rose 4-26/32 - its largest one-day increase since the index began in 1984. The previous record was Tuesday, when it rose 2-25/32. Before that, it was 2-21/32 for the original version of the Index on April 16, 1987.

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