The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1907-01-31
WALL STREET NOTES
Bears Still in Control Of the
Market Situation.
RENEW ATTACK ON PENNSY
Prices Drop a Little, hut on the
Whole Change Is of No Great Mo-
Eure-AtchisOn Offers 100000 in
Bonds of It's s1OO,OOO,OOO Issue.

Bonds of It's sJOO,OOO,OOO Issue.
Now York. Jan 30-A rumor that at
tracted quite a little interest was that
there was an inquiry for puts on 10000
shares Of stock, including several Of The
leading issues I'm the International list
very little under the present level Of
quotations. The report, II true, would in
dictate that either large interests were
bullish On the market. or wanted 10
create the impression that they were so.
The object Of buying puts near the mar
ket price might be to protect tha buyer
of stocks from serious loss in the event
that the market ran contrary 10 his eX-
pectation.
The operator who took on a lIne Of
long stock if at all apprshensivc that
some unexpected circumstance, political
or otherwise. might send the market down
before he had an opportunity TO get out
with profit might protect himself by buy
ing puts. and his loss on the down side
would thereby be limited by the option
The put makes him liable to De obliged
to turn over the stock BLOWOUT IN this
case only a little below-the market. while,
Of course, if the market goes up the privi-
Iega Will not be exercised, and the profit
on the stock against which the put formed
a hedge is made with less than the ordi-
nary amount of risk.
When the market showed signs OF rally
ing this morning the bears adopted new
tactics They recognized that their tips
of lower prices on this stock or that had
become rather monotonous. so they
changed the tenor of this and sought 10
damn with faint praise" by predicting
a slight rally, the sole object OF which
would be to give an opportunity for re-
newed attack on the general list under
cover of the apparent strength in few
issues.
That the tip might have the appearance
Of FEASIBILITY the stocks that really
showed greatest strength were picked
upon as those in which the alleged sham
operations were in progress. but although
many traders heard this explanation of
The strength. very few OF them attached
a1v importance to H. They were Of the
gpinion that the market was oyersold' and
preferred for the time being 10 stand out
altogether than 10 venture further on
the snort side. But the bear again made
Eood. and the market moved just as they
said il would
The ease with which the Pennsylvania
had been put down in the last hour OF
business yesterday left the impression
at the opening to-day that the stock was
vulnerable. and the bear interests, realiz- /
ing how great would De the influence Of I
a break In the stock Of America premier
in depression sentiment, began
a vigorous attack, in the hope Of dis
lodging some stock orders which were /
known to exist. only a littFe under the /.
opening level OF prices. These were actu- /
ally caught bat in the aggregate they 4
aid not amount to "a great deal There /
has been little bull speculation in Penn /
sylvania since the dividend was declared, /
a an increased rate, last fan, and the /
amount held on margin IN the street is 4
not very great. The talk for a good I
while past has been almost uniformly /
InfavOrabIe. but there have rec Htly been /
that the buying is better than /
The talk
II is entirely possible that, in addition
10 the effect on the general market, there /
vas another object in depressing Penn
being to afford interests
hat sold out last October on the rise
preceding the dividend declaration an
opportunity 70 buy their stock back at
is low a level as possible At the new
evel OF prices the stock yields nearly 5la
,er cent on the investment.
Erie like Pennsylvania, was subjected
% pressure for the sake Of the effect on
sentiment of a continued decline in the
tock Of an important trunk line. In re-
gard to Erie, rUmor was busy with the
amiliar story about a sale OF shOrt-term
totes TO finance Improvements under way
,ut Il was also said that there was an
Id bull account in the stock that has
,een kept out under all sorts Of condi-
iors in the money market. merely be
ause, the price being SMALL the interests
n the charges were relatively light. At
he present level, the stock is selling
over than at any previous time since
J04 The foreign view Of the present
worth OF the stock is indicated by the
act that London was a considerable
uyer Of the decline.
It might be inferred from the talk on
Atchison that the street had only just
earned that the company proposed to do
ONE financing for the purpose Of carry
lg on the Improvement work designed
o Increase the efficiency of the road as {
transportation machine. Yet the fact ,
that announcement had been made
reeks before Of the plan TO ask the ,
to authorize an issue OF
100, 100000 bonds and an increase of the
Ommon by "a corresponding amount in
rider that the bonds might be made
onvertible as other issues put out by
be road in the past few years have :
cen. J
The meeting Of stockholders at Topeka ,
b act upon the proposition was in &C. =
ordnance with a notice duly given and | ]
announcement had been
lade In manner that was practically
hcial that for the present only 5000
o of the bonds would be sold. There
)re there was no reason why the fact
hat the stockholders had approved a
roposition which everybody knew in ad-
lnce they would approve, should be con- ,
.rUed as new bear argument on the =
-och, nor was there any reason why A.,
ny one should be led to suppose that =
le whole bond issue would be sold this
bring. When such arguments as were
Sed on AtchisOn are resOrted to. il be-
ms TO look as If the bears have about !,
lhausted their stock of ammunition.
Union Pacific has now dropped to a !
vel where it yields per cent on the
h.. CT ]