Despite the heavy issuance of new Treasury securities, corporations continued to price new debt issues.

However, the heavy issuance came to an abrupt halt late last week, and this week's schedule for new offerings is light.

Given the negative mood of the market, heavy issuance of new corporate debt is also expected to weigh upon Treasury prices.

In other developments, the heavy issuance of new tax-exempt municipal bond offerings continued.

Despite the heavy issuance, traders said that prices of most widely traded issues in the secondary municipal bond market were unchanged to up 1/8 point.

Despite the heavy issuance, traders in the secondary market for tax-exempt bonds said that prices of most widely quoted issues rose by about 1/8 point.

But those early advances were later erased by a heavy issuance of corporate and municipal debt, which competes for the dollars of investors.

For the second straight week, heavy issuance of new municipal bonds pushed up yields on tax-exempt funds, IBC/Donoghue said.

Also pressuring bonds was the continued heavy issuance of corporate debt, as investors sold Treasury securities in favor of corporate paper.

They noted that the municipal bond market was stabilizing, since the heavy issuance of debt had abated, allowing investor demand to catch up to supply.