"There was a very strong blend of institutional and retail demand," one investment banker involved in the transaction said.

"It's the co-variance with large oil companies that's been the driver; it has not been big institutional demand."

Dealers said the overriding consideration was the absence of strong institutional demand for long-term bonds.

While private investors may be cautious about new issues, institutional demand is apparently holding up.

That target was raised last Thursday because of extremely strong institutional demand, and the stock was offered yesterday at $20 a share.

Orders received at Nikko, he said, indicated that institutional demand from Japan was good.

The Treasury note auction drew good institutional demand, although it had none of the excitement of the stock market.

For the longer maturities, which attracted good institutional demand, the bonds due in 2009 are priced to yield 7.55 percent.

I have seen conservative estimates that project institutional demand for European equities to be $11 trillion between now and 2010.

They said there was enough domestic institutional demand for Treasury issues to more than offset the negative influences.