New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1921-08-27
Stocks Rally
On Buying to
Close Accounts
thursdays Upturn, Checked
by Mexican Petroleum
Report. Carries Further:
Short Interest Contracts

Rapidly rising quotations on specu-
lntive stocks yesterday expressed the
belief Of traders that, though the
usually profitable for the last three
weeks, the world Of business is drift
ing toward no further cataclysms.
After six days OF falling prices stocks
began to respond on Thursday to the
impulses making for recovery. The
twisted news about Mexican Petroleum.
though promptly corrected, tended to
defer the upturn. Yesterday, however,
after an insignificant opening, rush
of short covering soon started a re-
bound of prices upward.
In the recent downward swing, which
represented some liquidation and q
large volume of short selling by wider
groups than usually try to extract
profit out Of falling quotations, tho
market sturdily resisted news favor
able to prices Signs of recovery in
industry were strangely ignored, as
prices of industrial stocks tumbled to
new low record values. Railroad
shares facing the prospect of better
net earnings during the second half
of the year, withstood the selling
pressure until a few days ago, when
they, too, succumbed. All classes Of
stocks rose yesterday. The swiftness
Of the fluctuations indicated unmis-
takably shor. covering, and the action
Of several OF the highly speculative
issues indicated that those who were
short were covering their commitments
only with great difficulty. Tho rally
was sustained. The last half hour Of
trading witnessed vigorous move
ment, and there was no definite in
dication at the close that the short
interest had completed covering
To-day's market ought to furnish a
good test Of tho attitude and size of
the surviving short interest. Tho bits
Of news needed to hndle the fame Of
= rally were published on Thursday-
declaration Of regular dividends by
General Electric and Railway Steel
Spring and distinctly more cheerful
note in the weekly reviews Of the steel
industry. These slight Developments
were moving only because the market
was conspicuously In an overeold con-
ditfon, with the short interest unwieldy
and large number Of stocks bearing
premiums when being lent to the bears.
Another influence favorable to prices
was the striking rise this week in raw
cotton quotations, accompanied by q
parallel Improvement in tho cotton
goods trade and In woolenA At the
high for the day yesterday cotton quo
tations were to ~ cents q pound
above tho depressed prices Of June.
The squirt continued yesterday. but to-
ward the close profit taking reduced
net gains to 85 to "A pointA
The continued significant prosress
made by the Federal Reserve system,
and particularly by the Federal Re-
serve Bank Of New York. in reserve
position was another indication Of the
advance that has been made since the
most critical phase Of the read}ustment
period. OF more immediate bearing on
the days stock prices, however. was
the decline in the renewal rate on call
money to per cent for the frsa time
since August Q Outside the rata az
change, loans were made. as low as 4
per cent. Although the bond market
was quiet firm prices for Investment
Issues reflected further tho influence Of
the approach toward easier credit con-
dlt!ons
In spite Of the improved tone IN The
stock market on an Increased volume
Of business and the further rise In cot
ton quotations, wheat SPECTATORS wore
cautious yesterday and prices declined
from Y to y Of cent. Trader.
feared tho competition Of the new crop
The foreign exchanges similarly 70
acted The pound sterling declined
~ cents.