The New York herald., 1921-05-26
FINANCIAL NEWS
AND COMMENT
Stocks Develop Strong Tone in
Afternoon After Industrials
Touch New Lows.

The explanations for yesterdays stock
market movements were almost entirely
in maneuvres OF professional specula-
tors who continued for a time to make
capital OF dividend reductions forcing
several Industrial issues to this years
lows and later elected to cover corn
mitments on the short side. The lat
ter development acted 10 inpart a
strong tone to prices in the afternoon,
Central Leather common and preferred.
Mexican Petroleum. Bethlehem Steel,
American Woolen. Crucible Steel. Peo-
| considerable higher than they did on
Tuesday. Little. If any. reflection was
evident of the clearing OF tho Silesian
situation. but the steadtness Of rails
Grafton of forecasts Of 10 to 16 per
cent. cut OF railroad wages ON July /
made the outlook for rail economies
more important than the market had
stock list was reoeding. The passing
of the Lackawanna Steel Company's
dividend an expected occurrence, was
followed by net gain in that COM
pany's stock, and the news had no
effect in checking the recovery OF the
final hour of business. Call money was
Z per cent throughout the day.
Fluctuations were fully in keeping
with circumstances surrounding dealings
of tho last few days The fail Of prices
since tho middle of last week had been
abrupt, accommodating sizabls and some
what unexpected profits ON paper for
many short sellers. In view OF the fact
that the market Is to be closed on Sat
urday and Monday 1t was the natural
thing for traders to believe that re-
bound would occur before the end OF the
week and the habit Of SPECTATORS since
the period Of rapid fluctuations began
In 1915 has been to make sure Of their
gains we'll in advance OF holiday. For
that reason 1t was doubtful whether the
industrials' recovery had any reference
to actual business and economic news.
The weekly surveys of the steel trade
were hardly OF character to promote
accumulation OF steel stocks. The Iron
Age reported further slowing down of
plant operation and OF buying. Con-
sumers evidently are counting heavily
on a reduction of freight rates to follow
cuts of wages and are not anxious to
contract ahead for lower carrying
charges. and that situation Is expected
to result in concessions In steel prices.
AS prominent railroad men have stated
that lower freight charges cannot be
looked for for several months under the
best OF conditions in respect to operat-
ing costs. 1t is seen that no date can be
set for a broad resumption of steel pur-
chases.
The foreign exchanges moved about
with such erratic changes of the price
front as to be bewildering TO bankers.
An overnight advance of more than
cent in sterling appeared to forecast an
extension of Tuesdays rally on wide
scale. but before noon the market tone
changed quickly. weakness succeeding
strength. Large offerings Of sterling,
francs and lire eliminated moro than
half of the gains of the preceding ses-
sion. Dealers in exchange were unable
to trace developments going on under
the surface and dispatches from London
disclosed puzzled state OF mind among
bankers over there Tho connection be-
tween this weeks sharp changes of quo
tations are not likely to be explained
until more information is obtainable
about methods used by Germany in
meeting the reparations payment due
by the end of the month.
The rather tense situation In Chicago,
the result of supplies Of wheat being
smaller than May delivery contracts call
for. was reflected again in a bulge of
GA cents a bushel. The July option re-
ceded slightly. May wheat sold as high
as s1.s5 a bushel, that price being the
highest since the great decline began
last autumn and s5 cents more than tho
minimum figure OF last month.