Evening star. [volume] (Washington, D.C.) 1854-1972, 1920-08-27
STOCKS OPEN FIRM,
WITH LOSS LATER
BY STUART r. WEST.


BY STUART r. WEST.
Special Dispatch 10 The Star.
WALL STREET. NEW YORK, Au-
gust 27-Prices were higher in the first
hour this morning and good part of
the list went through and in some cases
quite we'll above the high prices of the
first violent rally on Tuesday last.
This advance was sufficient to fully
realize the expectations of those who,
while recognizing the Improvement in
the credit situation and believing that
the low prices for stocks We're definitely
seen in the early part of last week. do
not anticipate more than a narrow trad
ing market for some time to come.
1t is the characteristic of a market
in trading position to swing back and
forth within range Of Il few points
and at the high prices reached this
morning the share list was as high as
it should be for one of these upturns.
The street. which always prefers an
outside to an inside reason. ascribed
the decline which set in after the first
hour to the fact that the call money
renewal was raised to S per cent from
the Z per cent figure at which it has
been standing for the last fortnight.
No doubt this marking up of the rate,
which was not fully expected. did have
some depressing effect upon sentl-
ment-
The traders started in to sell as
soon as the per cent quotation be-
came known. But there was very
little doubt also that the market
would have taken the same course,
even had the money remained sta
tionary.
1t was we'll understood that the
money market would work closer dur
inc ha int, faXU
September interest payments espe-
cially as the government mas been
drawing down its balances with tine
banks But it was also realized that
this condition would be only tenn
porary and that it would have no
significance for the money and credit
situation in its broader aspects.
IndustriaIS Leaders.
At the opening the leaders in the
industrial division were the Mexican
oils. Steel common. Industrial Alco-
hol and the tobaccos. The fact that
Steel common is to sell eX the quar-
terly dividend on Monday Influenced
considerable short covering, and this
demand was not appeaSed until the
stock was selling above 81.
Industrial Alcohol, Retail Stores,
Tobacco Products and American SUI
matra all ran up very easily, indl-
eating comparatively small offerings.
even AT prices wen dDoNe tine IeSeut-
Iy prevailing level. The upward move
ment kept on in railway issues, bonds
as well as stocks.
In the reaction, which set In toward
the end of the morning. 1t was the
motor stocks which took the lead
Pierce Arrow went through its pre-
vious low for the year under heavy
selling. Studebaker and Chandler
were also very weak. Elsewhere Mex
lean Petroleum. Baldwin Locomotive.
Stromberg. Replogle and other of the
more sensitive speculative issues fell
off rather sharply.
Baltimore and Ohio.
Baltimore and Ohio fooled the trad
ing element in the market today. 1t
had acted rather heavy yesterday
while other rails were strong. People
said that there was a lot for sale
around &c.,. to 39Es and predicted that
the buying power would prove made
quate to wade through this supply.
There was much surprise on the part
of these observers. accordingly, When
Baltimore suddenly began 10 come
out on the tape at 40 and then ran up
across this figure. 1t meant that the
stock had gotten into new high
ground and the chart readers and the
tape readers generally admitted that
this having happened there was noun
ing to go by in judging where the up
The point was again made that Bal
tjmore and Ohio common under the IN :
creased rates will earn as much as IT
did when it paid and 5 per cent dlVl-
dends. -.-,r. ~r
Motors and Sugars Weak.
There was also conspicuous weak
ness in one or two of the sugars, no.
tably Cuba cane, but outside of these
and of the motor and related groups
there was no evidence of fresh liqui-
dation The selling was either specu-
lative profit taking or professional
snort selling on the idea that the
market was due for reaction after
the rise yesterday and this morning.
Railroad stocks showed much re-
sistance to the downward tendency
in the industrial list.
Midway through the afternoon they
led a moderate rally. and at this
trail, Atchison and one or two others
reached their best prices of the day.
But this recovery was checked by
the running up of the money rate to
10 per cent, and by the continued
weakness in the motors and sugars.
1t was expected that the call loan
renewal would continue at or per
haps at per cent until the middle of
next week, by which time the special
demands of September settlement
period will be out of the way.
The 10 per cent rate on day-to-day
loans was paid by a small minority OF
borrowers Its significance was
obviously sentimental, fitting in con-
veniently with bear operations III
stocks.