The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-10-28
FINANCIAL NEWS
AND COMMENT
Stock Market Refuses to Rally
in Spite of Favorable De-
yelopments in News.
SPECIAL SHARES WEAK
Steels Lead Decline-Call
Rate Hits 10 p. C.-MOney
Situation UnfavOrable.

The stock market which refused to
go down last week in the face of
very formidable array OF unfavorable
developments, proved itself yesterday
equally az unresponsive to more reas-
surfing news. Not only did it fail TO
take cognizancc Of the healthy quar-
terly earnings statement issuel ut the
close of Tuesdays session by the Steel
Corporation but It also failed to take
notice of the settlement OF the British
coal strike. That the market should
refuse TO so up on the Steel statement
was not especially surprising in view
of the fact that that statement repre-
sented earnings accumulated when the
price situation was not as uncertain as
1t Is at tho present time; but that the
market should refuse to take notice OF
the settlement Of the British labor
troubles after all that has been said in
the financial community az 10 how much
the future OF the market depended upon
that settlement was distinctly disap
pointing even to the more optimistic OBJ
servers.
What It meant in short was that the
financial community on one hand had
given up hope of a prediction rally,
such as has been widely advertised, and
ON the other hand that stocks were be-
ing sold again on trade news it was in
the steel stocks principally that that
selling first made IT'S appearance Just
as was the case in the break or last
month The whole thing reflected back
again TO the rnSavorable conditions which
prevailed in general business. and to
statements which have been made re-
peatedly in responsible Quarters to the
effect that no permanent Improvement
in security prices would be possible
until the trade reaction had thoroughly
run its course. IT was disappointing of
course TO the average market follower
to find the hope of an election rally
fading. but at all events the way that
the speculative community looked at
things as the market closed yesterday
was that ic favorable earnings state
ment from the Steel Corporation to-
gether with the settlement Of the Brit
ish strike would not put prices UP what
was there in the immediate future that
would.
Probably the most surprising develop
ment of the day in so far as individual
stocks were concerned was the decline
OF approxirna tely q point In Steel common
at the outset. Tt was a case Of that
stock apparently selling after the pub
location OF the good news. Along with
steel fresh selling also broke out in the
independents. with Bethlehem 3 and Re-
public declining sharply. Various other
special stocks followed the leadership of
the steels. but the main weakness OF
the day centred in these stocks and in
the motor shares. The selling OF Cen
eral Motors was heavy again. that stock
getting down TO II. The leather stocks
we're inclined TO do better on short COW
ering and there was n very firm under
tone throughout the day in the oil SHARES.
that IS to say in the oil stocks which the
street regards as having been thoroughly
iiquidated.
The money situation continued TO oper-
ate against the market with n renewal
rate Of per cent. and 10 per cent money
in the last hour again. This was a direct
reflection of the Government withdraw
ais which will be made to-day and also
of the preparations which are being
made by the banks 10 take care of the
November 1 interest and dividend dis
bursements. Bankers who are in a po-
sition to know the facts of the case do
not expect real ease in money for the next
month. that is until the first part OF
December. Furthermore, Il is understood
that as n result OF the hcnvy Withdrawals
OF Government funds this week. together
with the movement OF funds to other
centres the banks statement viii b.
very unsavorable again. tt would not be
surprising. Il is declared in some
circles. 10 see the deficit increased in
the local Clearing House statement and.
what is more. record breaking decline
in the Federal Reserve Bank ratios n
Is declared in authoritative quarters that
the present strain Is by far the worst
that has been experienced since the early
part of the year. when money climbed
above Is per cent.