The New York herald., 1920-12-02
FINANCIAL NEWS
AND COMMENT
Stock Market Shows Technical
Strength After Sharp Rail
Liquidation.
GENERAL RALLY AT CLOSE
Renewal Rate for Call Money
Is Advanced to Seven
Per Cent.
GENERAL RALLY AT CLOSE

The stock market provided Wall Street
with another very impressive demon
stration of technical strength yesterday
following a further sharp liquidating
only did the great majorit.- a: Industrial
shares hold their ground In the decline
in the rails but there was an all round
rally in the last hour. which lifted
prices generally above those of the pre-
ceding days closing. This bore out all
that had been said about 1t in conserva-
tive quarters in the last few days, even
IL the railroad shares did not act as
well as might have been expected. They
came back somewhat with the indus
trials in the final period. but the key
to the rails lay In the Southern Pacific
plan. which was not made public until
after the market had closed for the day.
Southern Pacific itself rallied very
sharply after 1t had been driven down
several points, but this was more of a
reflection of technical conditions than 1t
was actual knowledge of the separation
plan.
The principal reason for the liquida-
ton In the rails yesterday lay in n
statement published in the morning pa
pers and warning the public against an
alleged plot to dominate the railroads
through the medium of one large union.
That statement probably was well timed
so far as the railroads were concerned
but 1t came at a time when the stock
market was Just beginning to get its
bearings again and naturally upset it
considerably. But that stocks could
rally the way they did after having de-
clined to their previous lows of the
year in many instances was considered
a very remarkab BILE demonstration by the
average observer 1t showed that the
market was much nearer bottom than
most people believed and furthermore
that there was buying power in the
market which had not been counted on
before. That the rally occurred In the
industrials rather than in the rails did
not mean any change in Wall Streets
attitude as to the rails but merely that
the financial community was waiting for
the Southern Pacific plan
1t was in Southern Pacific that the
break really started. The Street had
what 1t was selling for under the new
plan, and traders sold 1t heavily from
the start This started the whole rail-
road department on the down grade
and before the selling had been checked
several rails had broken through their
lows. While the railroads were having
their reaction the very best kind of re-
sistance was displayed IN the industrial
shares These issues had been strong
all day. and therefore 1t was natural
that they should lead the recovery once
the liquidation had been completed.
Among the industrials which did best
In the recovery were Baldwin. Steel
common, Mexican Petroleum, Pan
American and few of the motors. The
rally in Steel was probably the most
spectacular. that stock recovering near
ly all of its dividend. after having
broken So
As had been expected as a result OF
the higher rate for money at the close
OF Tuesdays trading. the renewal rate
was advanced to Z per cent. yesterday.
This was due in great part to the prep
arations for further Government with
drawals and in part TO the usual inter-
est and dividend disbursements at the
end Of the month. While money may
be slightly higher for the next few days,
IL Is not anticipated that Wall Street
will have much difficulty in this con-
nection for the rest of the year. Many
interests look for another furry with
the final payment Of Government taxes.
but IL the money market acts as it has
in the case of previous payments this
year It will continue relatively easy.
There was nothing Of special impor-
II