The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-10-30
FINANCIAL NEWS
AND COMMENT
Stock Market Continues Rally
and Prices Snap Back With
Remarkable Rapidly.
RAIL SHARES ARE ACTIVE
Money Is Still Tight-Cali
Loans After Renewing at
9 Go to 10 Per Cent.
RAIL SHARES ARE ACTIVE

II was clear from the action OF yester-
days stock market that Thursday morn
!ng's sharp decline in price did not mark
the resumption of the active downward
movement, but rather that the decline
had been more in the nature of bear
SCOOP II Il had been a real downward
movement, as some interests were in
cl'ned to suspect. the market yesterday
certainly would have continued Its down.
ward course. Instead, however, the mar
ket furnished fresh proof of Its oversold
condition by continuing the rally which
began with the sharp recovery of prizes
late on Thursday. Prices snapped back
all along the line with a rapidity that
astonlshed the bear contingent. II was
a very severe test for the market, but
the fact that stocks withsJood the selling
without developing fresh downward
tendency indicated to the average OBJ
server that although the market might
not get It's prediction rally. there was
nothing to prevent II from having post
election recovery.
AS on the preceding day and also the
day preceding that the market was pre-
vented from giving an accurate account
OF itself by high money rates. Those
rates were just as firm as ever, notwith-
standing the fact that some interests had
expected materially easier money before
the close. But In spite of the fact that
stocks could not be expected to advance
in the face of high money. the market
did give q good account of itself This
occurred even in the face OF further UNI
favorable developments in the trade
situation, notably the cutting of prices
by the rubber trade. Stocks held in the
face OF this, but this did not necessarily
mean that stocks had discounted the
x1rtrA ..,,ft q
movement. It simply meant that the
market had reached position whore II
was dangerous for the bears to continue
operations on the selling side until part
of this short interest d been eliminated
by q very substantial rally in prices
from current levels.
There was really much more atten-
ton given to the railroad shares than
to the industrials. but the fact that In
dustrials had been so weak In the pre-
ceding session naturally made them the
object OF most interest. This was be-
cause the Street was anxious to know
whether the market was going to indi-
cate resum ton of the downward
movement or whether II was going to
rally As IL turned out the indications
of rally were clear enough, not only
from the fact that stocks showed rally
ing power but from the action of indi-
vidual issues 1t was noticeable. for in
stance. for the first time, that there was
no discrimination, that all groups OF
stocks rallied alike. the steels and the
equipments. along with the oils and
others which admittedly have felt the
full force OF the reimbursement and price
cutting movement In the rails the out
standing feature Of the day was very
sharp upward movement in Southern
Pacific. That stock advanced sharply
and accompanying the advance came all
sorts OF stories regarding something in
store for stockholders. It was said that
the company planned to distribute It's
oil holdings TO its stockholders. but the
best Information was that the company
was planning to Increase its dividend
from to per cent.
There was no special change in the
money situation, which continued tight
Call money renewed at 2 per cent. and
went 20 10 per cent in the last hour as
on preceding days. There was no call
ing OF looms. however, for the first time
this week, circumstance which was
considered encouraging. Even II there
should be no calling OF loans, the Street
L. likely to have TO face at the begin
ming of next week another unfavorabie
set of bank statements. II is rumored
in conservative quarters that there Will
be record drop in reserve ratios In the
local Reserve Bank statement. and Il
would not surprise people who are well
Informed on money matters IL the deficit
was increased rather than wiped out OF
the Clearing House statement. II II as
sumed also that there will be- another
poor statement Of the combined position
Of the twelve reserve banks forthcom-
ing from Warrington