New-York tribune., 1921-04-28
Rise i'm Stocks
Halts Abruptly
On New Selling
Combination of Unfavorable
Developments and Re-
tirement of Short In
terest Leading Factors


unfavorable developments of varying
Importance yesterday the stock market
recovery, which has been carrying on
vigorously for several days. came to
an abrupt halt in reaction that forced
leading issues off rather sharply at
times and caused a realignment of
speculative sentiment.
Three factors were held mainly re-
sponsible for the change in feeling,
the less favorable advices from abroad
on the matter of German reparations,
the showing of tho United States Steel
Corporation in the first quarter of the
year and the reduction in the dividend
on Pennsylvania Railroad stock. More
over the sustained rise of the last
week had resulted in the retirement
of a portion of the outstanding short
interest, so that the market position
had become more vulnerable to selling
pressure. fact which the professional
traders operating for the decline did
not overlook. Dealings proceeded on
about the same basis as the day before.
Ne~'AA''S SHoAV dSdiIl VI Tue mlIIlOn-
share mark.
| The effect on sentiment of the slump
in the earnings of the Steel Corpora
tlon in the first quarter was seen at the
outset in the action of Steel COM
mon, which had displayed vigorous
strength in the closing hour on Tues
day. Although the opening quotations
were not much changed, selling pres
sure increased almost Immediately, and
the stock was offered freely thereafter.
declining late in the day to SO, where
it showed net decline of two points.
| Other steels yielded in sympathy for a
time, but hardened subsequently,
Crucible alone showing a large net loss
at the close. Traders argued that the
particularly bad showing made by the
corporation in the month of March was
prophetic of q further sharp drop in
earnings in the current quarter, espe-
clally since there has been no improve
ment to speak of in the industry, de-
spite the recent cut in prices. One of
the steel trade authorities estimated
yesterday that the industry as a whole
is operating at present on basis of
less than 40 per cent Of capacity. The
statement of untitled tonnage Of the
Steel Corporation as of the end Of
April is awaited with much interest.
as it should reflect the effect upon the
business of the principal producing
company OF the recent price. reductions.
Speculative sentiment ins. the after
noon was adversely affected by the
news of the reduction from SO to So in
the annual dividend basis of Pennsyl-
vania Railroad stock. Publication of
the announcement was followed by gen.
eral selling Of railway shares, the
whole group yielding under leadership
OF issues of the character of Union
York Central Chesapeake & Ohio.
Northern Pacific and Southern Pacific.
Pennsylvania stock dropped to 1914
after having sold earlier in the day at
363a. How much of the selling of the
rails on this news represented real in
vestment holdings is question, since
the fact that the Pennsylvania direc-
tors were likely to reduce the dividend
had long been known in Wall Street.
The development, however, tended to
emphasize the unfavorable position of
the railroads in general.
While the Street paid more attention.
to domestic developments than to the
international situation, the prospect of
possible hitch in the reparations
problem was somewhat disturbing and
the foreign exchanges were generally
easier, although the market was not
weak. Easier conditions in the domes-
TIC credit situation we're reflected in the
placing of prime commercial paper at
6ls to per cent, the lowest rate in
months. The market for the general
run of paper, however, is around TX to
7%. The Treasury withdraws Sc, 300
600 from local banks to-day.