Evening star., 1920-02-06
MARKET |SSWEPT
BY SELLING WAVE
BY STUART p. WEST.

Special Correspondent OF The Star.
WALL STREET, NEW YORK. Feb
ruary 6.-prices opened higher on the
stock exchange this morning and for
brief space the tendency was to-
ward recovery. Sentiment was some
what encouraged 10y the rally IN
sterling which carried sight drafts
on London up as high as $40. against
their extreme low OF 3.19A. Some OF
the speculative leaders in the course
of this early movement got up two
points or so. The Improvement, now
ever. was shortlved-
The street had hoped for easier
money conditions; there had been talk
during the first hour that the rate
would be lower than yesterday
When these expectations were upset
by the fixing of the renewal rate al
j. per cent. the same as the previous
day. the selling started once more.
II began gradually. affecting only
certain individual stocks. but grad,
ually gained in intensity until around
midday it swept everything before 1T.
Entire List Demoralized.
As prices got down below their pre-
vious low levels the pressure in
creased. because there had been lot
of fresh buying. against which stop
loss orders had been entered to take
effect in case the low points OF yes
terday were broken.
For time the whole list was de-
rnoralized with Steel common below
80. and with losses of to . points in
stocks like Mexican Petroleum. Pan
American. Industrial Alcohol. Ameri-
can International. Studebaker and
General Electric
There was acute wea kneSS in lows
priced oils. Liquidati tion continued in
-he rails. which was due in part to the
closing out of loans in which the rails
were held as collateral and in part to
foreign unloading caused by the ex-
change position
The extreme low prices were reached
there was swift rebound.
Selling In Rails.
II was very disturbing TO many
people that railway shares should
have been as weak as they were yes
terday and again this morning fol-
lowing the announcement of the
agreement reached by the Senate and
House conferees. Fear was expressed
that the new bill might be SO dis
plea sing in high quarters as to induce
liquidation even at these very low
prices. Inquiry around the street is
reasSuring on this point. 1t develops
the fact that the recent selling in the
rails has had nothing to do with the
new legislation.
y lot of it has represented the clos
ing out of loans in which the railway
shares formed part of the collateral
A good deal also has come from
abroad and has been the direct re-
suit of the exchange conditions. Some
houses think that the foreign selling
is the more important inference of
the two. while other houses say that
it is the forced selling out of loans
which is principally responsible.
General Electric Weak.
IT was not fortunate day to an
nounce new security issues, although
the proposed increase in General Elec-
trio stock from si25.000.000 to s175,-
00a. .100 was not unexpected. the street
had not looked for the accompanying
issue of s15,O00.000, 6 per cent deben-
ture bonds. There was a favorable
side to these announcements. OF course.
The new securities are to be sold for
the purpose of providing funds to ex-
pand General Electric's business. II
the company thought that retro
grade movement was impending in
general trade it would hardly go
ahead with an expan sion program.
But Wall street in the mood in which
1t was today refused to look at this
matter in it's favorable light. 1t took
addition to the supply of General Elec-
trio issues, which. under existing cir
cumstances. was regarded as bad
thing in a market sense.
American Beet Sugar.
The change in the sugar situation
has a little more than doubled the
earnings of American Beet Sugar over
the 1918 period.
1t is learned that company officials.
figuring on the crop being sold at
11h cents pound. see net earnings
of $2.050,000, which is applicable to
the common stock. The company.
however. has sold some sugar at IL
cents, which will increase this esti-
mate to probably $2.100,000. or about
$14 share on the common stock
for the fiscal year ending March 81.
compared with s6 o. share earned in
the same period last year.
Heavy Selling Movement.
Motors and oils were the objectives
of anos ser heavy selling movement
at midday. reacting 5 to 13 points
from highest quotations of the open
ing.
In their train were carried many
other active shares. including steels
and equipments. United States Steel
falling under 80.