The New York herald., 1921-01-13
FINANCIAL COMMENT
Stock Trading Narrows, but
Reflects Short Covering
Money Offerings Freer.

The action OF Industrial stocks yester-
day Indicated that the most urgent COW
ering OF short contracts. aftermath OF
the great decline OF December. had been
completed. In consequence of a lessened
demand for Cruclble Steel. Baldwin Lo-
comotlve and other favorite speculative
issues. business was in smaller volume
than on Monday and Tuesday. The mar
ket continued. however. to reflect the
buying OF traders who desired to tighten
short lines. this being most in evidence
In petroleum, paper. sugar and certain
steel and manufacturing issues. AS Of
ferings were rather light fairly sharp
advances occurred here and there at the
same time that stocks which had not
become prominent in the weeks upturn
were inclined toward lower levels. Rail-
road shares of the so-called Junior class.
including New Haven. Pere Marquette.
ST. Louis Southwestern and Southern
Railway. displayed a firm TO strong tone
all the way along and suggested that
speculative operations for the rise were
showing themselves In a group which
had been rather neglected since the open
ing of the year. A survey of the market
at the end Of trading failed to disclose
any features besides those OF technical
nature which usually appear soma time
during a recovery from levels of undue
depression.
The money situation Is becoming more
and more interesting. Proof that offer
ings were actually In much larger
amounts than per cent. call loan
rate on the Stock Exchange Indicated
~as supplied in the placing of some
loans outside at per cent and lower.
the funds evidently coming from banks
OF the interior which have found It diff
cult to keep New York balances at work
at the official" call rate. Whether or
not the money market, including time
funds. Is on the eve Of establishment on
basis lower than that which has pre-
vailed for the last two months remains
to be shown through general demands
for money and credit. 1t will be recalled
that an easement late In December was
so quickly followed by a rise to the
earlier levels as to be clearly premature.
But In the light Of news of business con-
ditions in all parts OF the country, every
indication points toward a further re-
duction Of credit use before there is
likely to be a real expansion of industry.
C. hafV Nv, y,
liquidation Of stocks OF goods in many
directions, and the cessation of plans Of
farmer organizations to hold their prod
ucts for higher prices Is resulting in
freer sales in the primary markets. In
regard to business conditions. this weeks
reviews OF iron and steel point out that
the resumption Of manufacturing In
some fields of Industrial endeavor is not
yet bringing a counterpart in the steel
trade. In fact. operations no higher
than 20 to 80 per cent. of capacity
among independent producers is being
accompanied by an easing tendency OF
certain prices. which forecast a decline
below the level long maintained by the
steel Cofporat tlon.
Considerable selling came into the for
eign exchange market, evidently profit
taking on the heels Of the recent strong
advance. Sterling sight drafts ended the
trading period at s3.72. Off cents from
the final rate of Tuesday. and moderate
reactions were general in Continental
exchanges. South American quotations
closed somewhat lower than the day be-
fore. but Chinese rates hrmed up on the
Improvement Of silver. The metal ad-
vanced three-Qusrters of q cent an
ounce in New York to &c cents.
Wheat prices In Chicago advanced
with a great deal OF strength. futures
showing net gains of 4 cents a bushel.
The advance of the exchanges in the
last ten days seems to have instilled
feeling into the grain market that for
eign purchases may expand Cotton also
advanced aided by short covering opera
tfons and the generally improved senti-