Harrisburg Default Hits Municipal Bond Market

Pennsylvania's capital of Harrisburg said it will skip a $3.29 million municipal-bond payment due in two weeks, marking the second-largest general-obligation municipal-bond default this year.

The city's inability to make the payment, which is expected to be covered by its bond insurer, may feed worries about parts of the $2.8 trillion municipal-bond market, particularly bonds issued by smaller entities that may have fewer resources than states or larger governments.