The Washington herald., 1921-10-26
PRICES PARALLEL ge:
SHORT COVERINGS
ONSTOCK CHANGE
Session Opens Vigorous .
ly With Heavy Buying
OF Mex. Pete.
CALL MONEY AT ssS-
Trading Is Active, and Indus;
ltrials Show Small Gains a.
Close-Rails Unchanged.

NEW YORK Oct ia DISPOSE
ton to cover short contracts Was
apparent in most of the markets
today and prices showed CORE
spending strength In the stock
market this movement which was
already apparent on yesterday,
opened vigorously with heavy buy
Ing Of Mexican Petroleum A favor
able earnings statement for the
hrst six months was the immediate
precipitating cause. The tendency
to cover spread. however, TO the
rest Of the list. and q general re-
treat of the shorts was soon In evil
dence. Trading was active, and
industrials showed q number Of 4
and point gains toward the close.
Rails were little changed. Call
money opened at 81 per cent ana
was advanced to 9 per cens during
the second hour.
Mexican Petreleua Short.
The kind Of punishment that was
melted out to shorts in Mexican Pc
troleum yesterday and today a.
measured not only by the number
Of points that the stock advanced.
but by the raising OF the premium
demanded in the loan crowd from
l-e4 afer the close yesterday to
LIE shortly after the opening this
morning. The shorts knew when
they read the earnings statement in
the morning newspapers that they
would be give an uncomfortable
time today. and Il was due TO the
efforts of some OF them to retire and
take their losses that the stock
shot up SO rapidly in the early
trading. The opening price Of l0sK
represented an overnight gain OF
IN points. 5000 shares changing
owner at that price. Thereafter
the stock moved up with only slight
opposition until losL was reached
before the end of the FIRST half hour.
The report for the first half of this
year. showing earnings equivalent
to about $3.50 a share on the COM
mon. was the best kind of an excuse
for driving the shorts into a dan
gerous corner. But there were
many observers who held that the
earnings of that period. which. by
the way. marked the peak OF pro-
duction In the Mexican fields. do
not eliminate the chief cause Of the
long decline in Mexican Petroleum
stock There 10 still an open ques-
ton about the future productivity
of the Mexican oil fields
May Lower Rates.
The financial community is lead
ing public sentiment to the point
where another lowering Of Federal
Reserve rediscount rates will meet
with general expectations No
downward revision of rates thus far
made has taken the street or the
banking fraternity as a whole by
surprise. Each OF them has been
predicted far in advance. and the
actual development therefore. has
appeared like an act in response to
public sentiment For several days
past or. to be more definite. since
publication of the Reserve Bank
statement last Friday. showing re-
markable improvement in reserve
ratios. the Street has been talking
about the likelihood of the present
per cent rediscount rate being
lower in the near future. The
directors will meet tomorrow after
noon and II they do not take def
mite action then the financial com
munity will talk more positive
terms OF favorable action on We'd
nesday of next week-and so on,
until lower rate becomes a fact
Drug stoeks-
Nothing that developed in the
stock market today added more 20
the feeling of renewed cofdence
than the rise in the drug stocks.
especially nUited Drug. This stock
closed at SIX yesterday and at
tracted little attention until the
furore created by the rise in Mex
lean Petroleum had subsidized. Then
drug started upward. advancing at
times a half point between sales
and continuing until IS was reached
around noon. In the same period
American Druggists syndicate went
from to eh. Commission houses
who were not surprised by the rise
In United Drug stated that the
movement was based on a report
that the company had succeeded In
greatly reducing its inventories
and is doing better business. Once
the movement started IL Is said
i L. - eel