The municipal market was slightly weaker yesterday as some of the week's largest offerings were priced in the new-issue market.

"It's a little bit weaker, but there's not a ton of activity," a trader in New York said. "We're probably down a basis point or two, maybe three in spots, but it's fairly quiet out there."

"We're definitely seeing a little bit of weakness, but it's maybe a basis point or so," a trader in Los Angeles said. "You could maybe even call it unchanged in spots. But there's certainly a weaker tone, and I don't know if I'd really say it's more than two basis points off anywhere."

In the new-issue market yesterday, Pennsylvania competitively sold $800 million of tax anticipation notes to JPMorgan with an effective rate of 0.30% with a 1.5% coupon. The credit is rated MIG-1 by Moody's Investors Service and SP-1-plus by Standard & Poor's.

In addition, Goldman, Sachs & Co. priced $500 million of bonds for New York’s Brooklyn Arena Local Development Corp. The bonds mature with a top yield of 6.58% in 2043. The credit is rated Baa3 by Moody’s and BBB-minus by Standard & Poor’s.Meanwhile, Morgan Stanley priced $450 million of BABs for Connecticut. The bonds mature from 2020 through 2023, with a term bond in 2029.

JPMorgan also priced $499.4 million of revenue bonds for the Massachusetts Health and Education Facilities Authority in two series.

Bonds from the $330.8 million Series J-1 mature from 2012 through 2025, with term bonds in 2029, 2034, and 2039. Yields range from 1.75% with a 3% coupon in 2012 to 5.11% with a 5% coupon in 2039. The bonds are callable at par in 2019.

Bonds from the $168.6 million Series J-2 mature from 2012 through 2024, with yields ranging from 1.75% with a 5% coupon in 2012 to 4.46% with a 5% coupon in 2024. The bonds are callable at par in 2019.

The credit is rated Aa2 by Moody's and AA by Standard & Poor's and Fitch.

Suffolk County, N.Y. competitively sold $350 million of tax anticipation notes to various bidders, including Goldman Sachs and Citi. Pricing information was not available by press time.

The credit is rated MIG-1 by Moody's, SP-1-plus by Standard & Poor's, and F1-plus by Fitch.

The Treasury market showed some losses yesterday. The yield on the benchmark 10-year note opened at 3.54% and was quoted near the end of the session at 3.59%.

The yield on the two-year note opened at 0.85% and was quoted near the end of the session at 0.87%. The yield on the 30-year bond was quoted near the end of the session at 4.52% after opening at 4.48%.

Yesterday's Municipal Market Data triple-A scale yielded 2.90% in 10 years and 3.64% in 20 years, after levels of 2.86% and 3.63% on Monday.

The scale yielded 4.12% in 30 years yesterday, matching Monday's level of 4.12%.

As of Monday's close, the triple-A muni scale in 10 years was at 80.8% of comparable Treasuries, 30-year munis were 92.2% of comparable Treasuries, and 30-year tax-exempt triple-A general obligation bonds were at 96.0% of the comparable London Interbank Offered Rate, according to MMD.

In economic data released yesterday, producer prices jumped 1.8% in November, boosted by finished energy goods, as prices on an annual basis rose for the first time in a year.

Wholesale core prices rose 0.5%, the largest increase since October 2008.

Economists expected producer prices to increase 0.8% in November and for core prices to be up 0.2%, according to the median estimate from Thomson Reuters.

Industrial production jumped 0.8% in November, more than economists' forecasts. The 0.8% rise followed a revised no change in production in October.

Meanwhile, capacity utilization rose to 71.3% in November from a revised 70.6% the previous month.

Economists expected industrial production to be up 0.5% in November, and for capacity utilization to rise to 71.1%, according to the median estimate from Thomson Reuters.

The Empire State Manufacturing Survey showed "conditions for New York manufacturers leveled off in December, following four months of improvement," the Federal Reserve Bank of New York yesterday reported.

Economists surveyed by Thomson Reuters had expected the index would be 24.50.

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