The New York herald., 1921-06-14
FINANCIAL NEWS
AND COMMENT
Stocks Rally After Early Drop
i'm Which Many Industries
Touch New Lows.

stocks which followed yesterday morn
industrial shares evidently lay In
rather abrupt slackening of the urgent
selling which made last weeks market
so weak. Prices receded two to more
than five points before noon. but after
ward not a few were carried upward
distance further than they had declined
and the list at the close was strong in
spots and free from weakness practically
everywhere, except in three or four rail-
road issues. The upturn, however, was
too brief to develop any characteristics
besides those which are always attached
to a rally that appears when the short
interest finds itself crowded and attempts
to cover contracts at the moment when
offerings recede in volume.
The recent liquidation has been as
cribed to the desire of individuals and
institutions to get cash for working capt.
tai and to the necessities of an approach
ing tax payment day. 1t looked yester-
day as though sales for raising money
to turn over to the Government on
Wednesday had been completed in major
part. But II that process was still under
sharp pressure on such stocks rs United
States Steel Mexican Petroleum, Great
Northern preferred. Northern Pacific,
Lackawanna Steel and others was re-
oil ~ aft ooly NV
partisans Of the short side. Steel was
forced down to the lowest level since
the summer of 1915. 1t was in that year
that war business began to pile up profits
and the stock climbed high from posi-
ton in the 30s during the early months.
When offerings became somewhat reluc-
tant yesterday afternoon bidders were
not troubled a. all about large fractional
advances between sales and real
scramble for stocks was in evidence at
| the close.
! The idea that sales were made to OBJ
tain funds with which to pay income
taxes is plausible in the light Of what
happened on last December in the fort
night before a quarterly income tax pay
ment fell due. 1t was just prior to the
due date that the winter slump was
most acute and afterward the market
gradually improved. The situation has
been complicated this quarter by reason
of concerted efforts to strengthen the
cash and credit position OF corporations
carrying unsold goods. and the next
few days are likely to tell how accu-
rate is the theory that particular needs
have caused persistent liquidation since
the first of the month The rally yes
terday was helped by decidedly plenti-
full supply of funds for temporary bor-
rowing, a renewal rate of 6 per cent
on the New York Stock Exchange being
| followed by offerings outside at and
even at AZ per cent,
The weakness of Great Northern pre-
ferred and Northern Pacific were recog-
nized as being attached to sentiment
about dividend action later In the
month. At their lowest points those
issues were and "A points, respec-
lively, unuer tnelr quotations or last
Saturday and the final rally still left
the stocks weak. The unsettlement Of
industrials in the first hour was fur
thered by actual dividend action of un-
favorable import, including the passing
OF the Punta Allegro Company's dividend.
What has developed almost daily during
the last fortnight shows that the divi-
dend outlook is decidedly uncertain. al
though the movement of stocks seem
ingly has gone far In discounting
events to come.
The foreign exchanges were steadier
throughout the day than they had been
since German reparation payment be-
gan. Sterling swung through a range
of less than a cent, closing a quarter
OF a cent lower than on Saturday at
3.73Ss. In the bond market the feature
was another bulge of Mexican Govern
ment issues, for which a cogent reason
was presented In news that payment OF
interest was likely to be renewed on
July 1. Wheat strode forward with
| gains Of to ) u cents a bushel stimu-
lated by additional bearish crop news.
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