The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-01-31
FINANCIAL NEWS
AND COMMENT
Rapid Recovery From Reaction
in StOcks-Prices Reach
New Levels.
HEAVY FOREIGN BUYING
European Purchases Here This
Week Estimated at
10000 Shares.
HEAVY FOREIGN BUYING

since foreign liquidation followed the out
break Of the Balkan war in 1912 was
one Of the impressive features of a strik-
ing stock market yesterday. The market
itself. responding to the stimulus OF Euro
pean purchases conducted throughout the
session. proceeded to rally with snap
from the moderate midweek reaction and
recovery was accelerated by a resumption
OF buying for domestic investment and
speculative account. A natural outcome
of all this was the hasty and headlong
retreat of the professional short interest.
which had been increasing rapidly on the
theory that tho January rise had not
only been overdone but had exhausted all
the bulish possibilities Of the situation
bearing on values for some time to come.
Total dealings expanded substantially
over the previous scale Of the week and
In the afternoon the rise was remarkable
for its breadth and buoyancy. The ad-
vance was carried steadily along to the
close. which was made at the highest
prices Of the day and established a new
high average for the upturn which began
In December.
Canadian Pacific was conspicuous for
the extent of it's recovery on "a combina-
tion OF heavy Berlin absorption and local
short covering. but there would he little
point IN singing out features of the list
for comment. influential stocks Of in
vestment grade provided stimulating
leadership. but the upward movement was
altogether general and included shares OF
every description and quality. Even the
Rumely stocks closed at n net gain after
Il forenoon collapse to new low figures.
Opinion during the session and at the end
of the day was that while the reaction
OF the week had not afforded any very
severe test of the markets position II
was probably all the more significant that
reaction had not gone Very far before
the advance was resumed with so much
vigor. There were indications OF effort
directed toward the continuation Of the
January rise. but there was something
convincing in the response which It ellie
tied. II was noteworthy that on the
previous days Of the week selling not only
did not follow the market down. for trad
ing contracted on the decline. but
when prices started up again buying WAS
excited in a fashion which testified to the
prevalence of bullish disposition.
II WAS not wholly apparent that the
heavy foreign purchases represented a
further process Of accumulation rather
than the belated retirement Of stale
arbitrage account Of great dimensions
on the short side. but while there may
have been "a substantial amount of such
short covering, the indications are that
Europe has been engaged in replacins
the normal line OF American stocks which
IT has been practically without for more
than u year. Yesterday. for the first
time this week, the European purchases
did not stop in the forenoon, hut went on
without interruption TO the close. They
were estimated very conservatively AZ
fully $4,000 shares and came not only
through arbitrage houses but on direct
order both from London and the Con-
tinent Europe has bought perhaps l5o,-
600 shares here in the last few days. nm
absorption which Is enough to account
for the resistance which the market
showed on decline. and the cumulative
efrec, of persistent foreign buying must
have been largely responsible for the
swiftness Of yesterdays recovery.
Foreign finance seems almost to have
regained complete confidence in the OUT
look for values everywhere AZ Il result
Of the Indications of abundant ease now
furnished 10y the money market. and In
consequence also OF the satisfactory ap-
petite for new securities which the in
yestment market Is displaying. There
had to be worldwide liquidation To put
the money market IN rs present shape
but 1t seems now that between liquidation
and the current recovery OF investment
confidence capital supplies are likely 10
prove adequate to the task OF accomno-
dating borrowing demands which con
front them. although until worldwide liz.
uidation had been induced the capital
markets were In q state of depletion
Naturally enough the demonstration Of
foreign confidence communicated to the
Wall Street stock market has tendency
to influence the spread OF confidence
here, especially as the natural optimism
OF the American business community has
been disposed to assert itself lately on
sentimental grounds at first but strength
cned by the signs of n growing if1uir?
, for investment securities.
The latest token of that sort was ar
forded yesterday by the promptness with
which the new Offering OF S9.'Al,OOO OF
St Paul railway general mortgage Va
per cent. bonds vas taken from the bank
ers at 1921. This Is part of the same is
sue from which bonds were offered last
spring at 9Sts, and moved very slowly.
but are now quoted around lO3 70.
| Purely financial matters and chiefly tho
action OF the stock market itself usurped
Wall Street attention during the day
There was nothing gratifying in the
Washington advices about the status OF
our foreign affairs or the progress OF the
new trust legislation, but all this was
! overlooked. The preliminary compilations
| Of the countrys bank clearings for the
week suggested an increase for the first
time in several months Call loans re-
newed at Ia. per cent, and on the known
| movements of money II was estimated
| that the local banks had made a cash
| gain of about s10,O00.000 for the week,
bringing the gain for the month up ia
| about $4,000. 900. Foreign exchange held
| around 4S5SO for demand sterling. but
| II appeared that another shipment of gold
to France would be announced In tks
course of the next few DAYS although Lon