The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-10-29
FINANCIAL NEWS
AND COMMENT
After Early Decline Stock
Market Makes Unaccountable
Afternoon Rally.
STEELS ARE UNDER FIRE
Underlying Conditions and
Money Situation Show
No Changes.
STEELS ARE UNDER FIRE

For tho first half of Yesterdays SEES
sion OF the stock market the decline
which began with the publication OF the
quarterly earnings statement of the
Steel Corporation was continued The
leading fssues-that Is to say. stocks of
the type OF Steel common and Baldwin
lost ground rapidly under the fire OF
| the selling, with the average price of
industrlals approaching the lows of a
month or so ago. In the afternoon, how
ever. the market suffered a complete re-
versal of form and stocks rallied al
most as easily as they had gone down
in the forenoon. There was nothing In
the news TO account for the sudden
change, and it left many observers COM
pletely puzzled. The only satisfactory
explanation offered was that stocks had
become oversold IN the course of the
forenoon and that the shorts had run
to cover on the first indication OF re-
sistance. but that explanation was not
taken seriously in conservative quarters
because OF two considerations-first,b be-
cause there was real liquidation on the
decline and. second. because the market
had gained entirely too much momentum
to stop 30 suddenly.
Nevertheless the change in the char
acter OF the trading was very marked
and carried stocks up moro than q
point on the average. As a matter Of
Ae[Sly III 50 us lIlo UldTheI averages
were concerned. the market showed only
a fractional decline at the finish, where
as at midday the averages stood close to
their lows OF last month. II the rally
had occurred In the face OF real news
there would have been no doubt about l.
at all. but inasmuch as ii came out of
clear sky the average market OBJ
server was inclined to doubt whether
IL was indicative of an important change
for the heftar hoA
instance. some change In the underlying
situation the market would not have
been half so puzzling, but there was no
change whatever in fundamental con-
dltions. Those conditions remained just
as they have all the way along. not only
in the case of the iron and steel trade
but also in other commodities. Neither
was there any change in the money stu
alton. That market remained just as
tight as before in spite of the declining
stock market, which generally means
lessening OF the demand for speculative
funds.
AS was the case in previous sessions,
the most severe selling occurred In the
steel shares. Steel common itself got
down within a fraction of It's low TO-
the year and there vas heavy LIQUIDATION
likewise in the independents. Naturally
with the steel shares under fire 1t was
hardly 10 be expected that other stocks
would hold up IN the face of the selling.
They went down, but losses in that d.
rection were not nearly as marked as
they were in steels and some specialties.
The motors. except General Motors, for
instance. gave a better account OF them
selves than did the general run OF Sc
curities, but on tho other hand Inter-
national Paper was extremely heavy.
It was noticeable, furthermore. in the
afternoon that the steel shares did nos
rally as easily as did other stocks. While
stocks of the type of United Fruit were
moving forward sharply, Steel common
did not have strength enough to rally a
full point Neither was there any spe-
cial strength IN Baldwin. although that
stock did get well above its low of the
day.
There was no change during the day
In the money situation. The renewal
rate was fixed again at per cent. an
new loans were bid up TO 10 per cent. in
the last hour, the same as on previous
days of this week. There was much talk
during the afternoon. particularly fol-
lowing the rally in stocks, that money
would turn easier for the rest of the
week. but that talk was not taken very
seriously in banking quarters, In which
preparations were going on TO meet tha
usual monthly interest and dividend Mis-
bursements. If there was to be any re
taxation in money, IL was declared, 1:
would come only after those disburse-
ments should have been completed. 1.
was declared, furthermore, that there
hardly could be an improvement In the
money situation with Wall Street facing
another bad set OF bank statements this
week