The volatility that has rocked Wall Street in recent weeks has continued to affect the volume of new municipal bond issues. Large negotiated deals have been placed on hold in light of the massive flight to quality in the Treasury market, and extreme market dislocation has continued to follow the latest fallout from the forced sales of two banking behemoths.

Many municipalities are choosing to put on the sidelines deals that would have otherwise been priced last week or this week due to the tumultuous environment that developed after the news of Lehman Brothers Inc.'s bankruptcy and subsequent agreement to sell substantially all of its North American businesses and operating assets to Barclays Capital, which coincided with Bank of America's planned purchase of Merrill Lynch & Co.

Those events were then topped off by the news that the Federal Reserve decided on an $85 million bailout of American International Group Inc. as well as the announcement of an overall market rescue plan by federal officials Friday.

Deals have continued to be postponed-or significantly reduced in size—and many of the largest deals are without a specific sale date and instead are being considered for day-to- day pricing depending on market conditions.

Underwriters say they are closely monitoring the market with the hopes of seeing enough stability, liquidity and demand for new issues to be priced.

Some experts compared the market's current state to a fatal financial virus, adding that large bellwether deals from a general market name could help spreads bounce back to more normal levels.

"Every day is a new day. You don't know what's going to happen over the weekend, so we will re-evaluate everything Monday morning," one Wall Street underwriter said.