The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-10-05
FINANCIAL NEWS
AND COMMENT
Stock Market Rally Continues
and Industrials and Rails
Are Equal Favorites.
STEEL GETS BACK TO 81
Traders Take Up New Railroad
Issues-MOney Situation
Is Unchanged.
STEEL GETS BACK TO 81

/ The rally in the stock market was
carried further during yesterdays trad
ing. the industrials rece V e. fully as
much attention as did the rails. But in
the places of Northern Pacific and other
Hill roads. which sold off rather alb
ruptly on. profit taking. the Street took
up Reading, Union and Canadian Pacific
and several low priced issues which
could not be put In the class OF having
been overbought. The stocks in the
| group. however which were active last
week closed generally lower, but the
reaction was not sufficient to satisfy
those who looked upon the movement
last week as having been entirely too
enthusiastic. Indeed, II. could hardly be
said that there was any reaction at all.
The weak spots were so fully matched
/ by strong ones that whatever setback
occurred left surprisingly little evidence
! that there was going to be let-up in
so far as the railroad stocks were con-
cerned. With the industrials, however.
| 1t was still a matter OF short covering
entirely.
Naturally with short covering, the
principal incentive for higher prices in
the industrial group. the most progress
was recorded In stocks In which the
short interest was the largest. These
! issues the shorts marked up very enthu-
siastically on themselves. but not in the
face of any change in industrial condi-
| lions. The situation In that respect was
precisely what it had been all along.
Judge Gary of the Steel Corporation re-
turned to New York but had nothing
to say that might have been expected
to cause Wall Street to change its opin-
ion that the independents would have to
lower their prices. 1t was probably dis
appointing to the bear contingent to
find the market advancing in the face
of Saturdays poor bank statement, but
the explanation was simple enough It
was a question entirely of the short
interest in the industrials having grown
too large. of the market readjusting
itself. and as to how far that covering
would go before stocks were offered
again in sufficient volume to cause a
renewal of the selling movement that
had been halted for the moment.
The industrial stocks did best in the
last hour. when the covering became
rather general. On that movement Steel
common got up above 81 for the first
time since the downward movement
rtarted, while motor stocks recorded
further progress on top of their Satur
days gains. Certain Industrial stocks.
however, continued to lag behind in spite
oil the strength in other directions, and
the most notable of them were Baldwin
and the Mexican oils. The reason for
this apparently lay in the fact that the
decline in Baldwin and Mexican Petro-
leum had not been so severe and that
they had not accumulated the same short
interest as had other industrial stocks.
The rails made their best progress dur
ing the first hour or so under the leader
ship of Canadian and Union Pacific,
roth of which touched new highs for
the movement The other rails which
have been prominent In the dealings
iately were neavy, their gains offsettinE
n n small measure the progress that
was recorded in Union and other rails
The low-priced stocks were prominent
again also, st. Paul preferred and COM
mon getting to new highs for the move
ment as well as for the year.
There was no change in the money
situation from that of Friday. The re-
newal rate was per cent. and. as on
Friday, new loans were made at per
rent in the last hour. The change In
money, however, had no more effect on
trading than did the bank statement.
Wall Street Is convinced that the trouble
with the stock market does not lie so
much with money now as it does with
the price-cut.ing situation. II the Street
had been alarmed about money there
certainly would have been very sharp
break In stocks over the bank statement.
8 that document was one of the poorest
that has been issued in recent weeks.
The combined statement I'm Washington
was not much better either nor was
there any room for encouragement In the
| Clearing House statement. which showed
| deficit in reserve.