The failed auction that last week epitomized the problems of the municipal auction-rate securities market settled down yesterday as a Port Authority of New York and New Jersey series of auction-rate bonds that had spiked to 20% cleared yesterday at 8%. The rate is still higher than the 4.3% the bonds were at a week before.

Although the Port Authority only had a single auction failure last week, its other auction bonds also cleared at higher rates. Those have begun to come down as well.

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