The Washington herald., 1906-10-11
WALL STREET NOTES.

New York, Oct 10-With a resumption
Of activity. which at times recalled the
operations at the end Of last week, Steel
common made a new high record for the
present year, although it did not quite
fulfill the prediction made on Monday that
it would cross so within the present week.
The movement caused little surprise, as
| for several days the underlying strength
of the stock has been the subject OF gen
eral comment. While speculative interest
took profits freely on the announcement
of the ore deal. all offerings found a good
market, although It was never possible 70
ascertain the real source Of buying. One
thing is certain: some large interest has
within the past few days taken a great
amount of Steel at prices not far from the
present level What the buying has been
based upon may only be surnised, al
though fair clew IS afforded by the fact
that the ore deal has been completed and
that the dividend action and publication
Of earnings are scheduled for the last
Tuesday Of the present month. According
to a recognized authority on United States
Steel matters, that company viii earn in
the current month sl4,3o0,0 900 net, making
this the best month on record. The estl-
mate is based on results of the first ten
days Of the month and the simple rule OF
multiplication without any allowance for
the fact that the average daily returns
are likely TO show improvement during the
remainder OF the period. The largest net
earnings so far reported for any month
were those for May last, which reached
the total of S140l, ,601, or about a quarter
= Ali. -
results for October. The same authority
estimates that the statement for the
quarter ended September 80. which VIII be
given out IN about three weeks, will show
earnings Of about So, 800, 600, or only about
$4,000 less than those for the preceding
quarter. notwithstanding the usual sus-
pension Of operations at some OF the
works during the hot weather.
At 1.30 bear stOp-Orders were uncovered
in Union Pacific, but the closer the buy
ing was scrutinized the clearer It be-
came that accumulation by strong inter
est was much more influential in causing
the advance in the stock than the ef-
forts Of the shorts 70 retreat from their
position. The annual report was expect
ed to make its appearance at any mo-
ment, and while Il was not made public
during the course of the session, there
was a widespread belief that the docu-
ment would show earnings Of q pei. cent
for the common stock from the opera
tions Of the road and the company's in
vestments in other securities. How mucll
OF this was contributed by Great NortF-
ern rights TumOr did not mention. aJ,d
altogether It was conceded that ttere
were a great many points of interesS yer
70 be disclosed beyond what was shown
In the income account published at the
time of the dividend declaration. One Of
the things which the traders did not like
about the rise in Union Pacific was tn,
II took them unawares-was indeed acceI-
Grated by their forced covering of short
contracts-and another was that t
brought no immediate response from
other stocks, so that when, having COW
cred where they were short and gone long
Of issues which they thought should feel
the effect, their new ventures did not as
promptly as they expected them BRING
profits TO make up for their earlier losses.
Some Of them, disappointed over this re
suit, again changed their position and
were whipsawed in the growing strength
displayed in the general market later in
the day.
4
especially make a substantial advance IN
sympathy with Union Pacific was that of
the controlled company, Southern Pacific.
The latter did, as d matter Of fact. secure
a reasonable advance. but its rise was
in one respect not as great. although
from another point Of view the rise was
greater The traders who expected 10
make a big profit by a quick turn IN
Southern Pacific forgot that on the basis
Of yield this stock was really selling
higher than Union Pacific. The move in
the latter only about equalized matters.
Even when Union Pacific sold at 80.
Southern was quoted at 95I4. the former
being therefore half q point under the
and this was the relationship
maintained at neon. showing a large in
crease in both gross and net, and afford
ing a further reason for strength in this
stock II would seem, then, that the ad-
vance in Southern Pacific was as great
as should have been expected but the
traders who had acted on impulse were
disappointed because 1t was not larger.
Revival Of the old rumor Of an advance
10 10 per cent in the dividend rate has
been caused by the rise in American
and Refining. although the an
nual report issued a few weeks ago GER
tainly did not afford a basis for any such
expectations. It is stated. however, that
earnings this year are well above those
Of last year. but the interests which make
the statement intimate that it would be
premature TO calculate possibilities Of in
creased dividend distributions until accu-
mulated surplus becomes large enough 10
afford reasonable security that the new
rate to be maintained even during a Pc
riOd Of temporary reaction in business. /
At its present dividend, Shelters common /
yields only 4.3 per cent on the Investment, /
against 80 per cent on Union Pacific. /
while on 10 basis the yield on a market /
price of 16l would be only 62 per cent. as /
against about ga per cent on American /
Locomotive at present market price, and I
rate on dividend distribution Il would 4
appear. therefore. that American Smelt- /
ing and Refining has pretty well discount |
ed dividend possibilities unless there /
should be rights in addition, so that the /
movement may be little more than a spec /
ulative operation based On a favorable /
technical position. The most satisfactory
thing about the speculation in mining /
stocks on the curb is that the amount of /
money involved is not very large, most Of /
the issues being Of small volume and /
low price.
Brokers who narrowly watched the
buying Of Pennsylvania for circumstan-
-ial confirmation of the report Of an in /
crease in the dividend rate failed to get /
i, and came 10 the conclusion that talk 1
vas better than the buying. They ad-
nitted, however, that they were at a .
oss TO account for the unmistakable
strength in the stock. Those whose buy
ng has always attracted attention in
Pennsylvania did not seem TO be repre-
sented at all. yet It was hard TO figure
)ut how the movement could have been
N cried on as Il Nrqs Wifhnnf fhnfr . 8 |