The municipal market was weaker Friday, ahead of a three-day weekend, and amid weakness in Treasuries and another dreadful day in the stock market.

"We're pretty much in line with Treasuries right now," a trader in New York said. "They're off, and so are we. We're definitely seeing weakness that escalates the further out you go along the curve. With real short-term paper, yields are up maybe two or three basis points. It goes out to five, six, seven with the intermediate paper, but you can see some long bonds going eight, nine basis points cheaper."

Trades reported by the Municipal Securities Rulemaking Board today showed losses. A dealer bought from a customer California 5.5s of 2030 at 6.34%, eight basis points higher than where they were sold Thursday. A dealer sold to a customer Hawaii 5s of 2025 at 5.60%, up seven basis points from where they traded Thursday. A dealer sold to a customer Puerto Rico Aqueduct & Sewer Authority 6.1s of 2034 at 6.26%, five basis points higher than where they were sold Thursday. A dealer sold to a customer New York State Dormitory Authority 5s of 2030 at 5.19%, eight basis points higher than where they traded Thursday.

"A lot of people are just dumping bonds before the long weekend," a trader in Los Angeles said. "People just don't want to be heavy going into the holiday, so they're doing what they have to do to move paper."

"Trading is all over," a trader in New Jersey. "There's really no rhyme or reason to where some of this stuff is trading."

The Treasury market showed losses Friday. The yield on the benchmark 10-year Treasury note, which opened at 3.79%, was quoted near the end of the session at 3.87%. The yield on the two-year note opened at 1.53%, and was quoted near the end of the session at 1.63%. And the 30-year Treasury bond, which opened at 4.11%, was quoted near the end of the session at 4.14%.

In economic data, import prices dropped 3.0% in September, after a revised 2.6% decline the previous month. Economists polled by Thomson Reuters had predicted a 2.5% drop.

Activity in the new-issue market was light Friday. However, several deals will come to market this week as primary market activity continues to return.

In some of the largest new issues scheduled to come to market, California is planning a $4 billion note sale, JPMorgan will bring to market $500 million of bonds for New York's Metropolitan Transportation Authority, Goldman, Sachs & Co. will price $425 million of bonds for Connecticut, Morgan Stanley will sell $375 million of bonds for Ohio, and JPMorgan will price $350 million of debt for the Massachusetts Bay Transportation Authority.

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