New-York tribune., 1918-02-01

to the expansion of trad
;ng and sharp recovery Of prices on
the Stock Exchange yesterday, one
must look back of the days develop
ments to find the chief cause Of the
sudden Improvement. 1t must be re-
membered that for some weeks the
stock market had made practically
no response to news Of the utmost
Importance. The drastic ana uncx-
pected order Of the Fuel Administra-
tor restricting industrial activity,
for example, caused scarcely rip
pie. Dealings and price fluctuations
alike had been flat throughout the
month and were produced by moth
ing more than aimless specula-
tion by professional traders. But
during this period Of industrial and
political turmoil and extreme quiet
in the stock market one thing has
been clearly established, namely, that
stocks are strongly held-perhaps
more strongly than ever before in
The sense that more of them are
owned outright and fewer on margin
and that only developments more
disturbing than any now in view
could cause a renewal of the liquida-
ton which terminated with the cul-
mination of the year-long decline
late last fall. There have been many
developments in recent weeks that
ordinarily would have produced a
tremendous wave of liquidation. But
holders of securities were unmoved
and refused to be frightened into
selling. A number of professional
spectators displayed less wisdom
by selling short in anticipation of a
fall which fortunately failed to ma
terialize. There was, therefore, n
large short interest in the market,
and those who built it up paid e.
heavy penalty when the buying
movement began yesterday. Indeed,
the movement appeared to have its
inception in short covering. But
whether or not that was the case,
the buying of this nature was heav-
lily supplemented by purchases for
long account coming from both pro-
fessional traders and "outsiders. "
This latter was really the most sig
nificant feature of the day, for there
has been no outside participation of
consequence since the market SUBJ
sided after the outburst of enthusl-
asm engendered by the Presidents
railroad proclamation. The sensa.
tional advances Of General Motors,
which at one time was Is points
above the closing price on Wednes-
day; General Electric, which ad-
vanced 9ss, and United States Steel
common, up about points, were due
largely, if not chiefly, to scramble
to cover short commitments. Wheth-
er the buying movement which
started yesterday will be sustained
depends on the extent to which an
outside following is attracted. Ris-
ing prices sometimes arouse general
interest in the market, but it seems
doubtful if that will be the case ir
the present instance. There are too
many restraining influences to per
nit an important bull speculation at
This time.
Reports Of general strike In
Germany played some part in the
stock market, bringing renewal Of
the discussion Of prospects for an
early peace. Foreign bonds were
Influenced more than stocks by peace
rumors, however, and a general adj
vance in this section of the list oc-
Cured. The French municipal loans
were especially strong, City of
Lyons IS advancing 3 points to go
while the City of Paris IS rose 2es
points. Most of the foreign govern
ment issues also gained some ground
but, in contradistinction to theil
strength, Liberty bonds declined
sharply to new low levels, The 331a 9
dropped to 97.20, and rallied later TO
90, while the second 4s fell to 95.7G
and recovered to $500. The selling
Of these bonds probably has been in
duced by fears that another large
issue will be brought out at the same
rate of interest as the last offering.
1t has been reported that the Treas
ury may decide to make no advance
in the rate, but such reports are not
much credited in Wall Street, where
it is generally believed the next loan
will bear 4. Il or 4 1s per cent interest.