The New York herald., 1922-01-04
FINANCIAL NEWS
AND COMMENT
Stocks Start New Year With
Sharp Fall-July Grain at
Low Since 1914.

The auspices under which the new
year started IN the markets yesterday
were hardly favorable when examined
in the light OF surface changes in specu-
lative events. Stocks broke down
sharply. declines for the session extend
ing from 2 to more than IL points
among important members Of the Indus
trial share group. Heavy selling drove
wheat quotations back so rapidly that
at one time grain on future contract for
delivery next July sold lower than that
option had sold since 1914. Cotton
futures declined sS.75 bale and left
OF near the lowest levels Of the day
Bonds were uncertain In their move-
ments and the foreign exchanges were
inclined lower. The call money rate.
however. continued to show fairly
easy state Of funds for temporary use.
going from 5la per cent. to per cent.
Some reasons why speculative senti-
ment should show change Of heart
could be defined; others were obscure
but seemed to explain why lot of SELL
Ing OF stocks. postponed In December,
began Immediately at the opening of
1922. The unexpected banking difficul-
ties In Chicago. entailing absorption of
two weakened institutions by strong
organization. undoubtedly unsettled the
grain market and had abrupt refiexes In
securities. The Chicago news showed
that the troubles out there had been
taken In hand In vigorous fashion. but
| followers Of grain trading were appre-
hensive lest efforts to correct overexten-
sion OF certain interests would bring out
heavy offerings and prices slipped back
to cents bushel. OF more effect on
stocks than the developments In Chicago
was apparently the cut Of SO cents a
| barrel which occurred in Pennsylvania
crude petroleum. OIL stocks led the
days reaction. Standard of New Jersey
being the weakest Issue on the New
York Stock Exchange. and the persistent
weakness Of that group tended to head
Off rallying tendencies elsewhere.
The crude oil reduction was altogether
unexpected. as statistics Of production
and OF supplies in the hands of large
refiners and unevenness In refined OIL
quotations Of late had suggested TO some
students Of that business that petroleum
had been bid upward too rapidly in
September and October to hold all gains
then made. In addition to the force of
the fall of Pennsylvania oil, the indus
trial shares found unfavorable informa-
ton in the Kelly-Springfleld Tire Com
pany's omission Of its quarterly stock
dividend. Outside OF those matters there
was little news about business which
had not been discussed before, and II
was probable that selling Of stocks came
from persons with sizeable profits on
paper reluctant to have them figure In
income tax statements Of 1921 income.
The light wasted character Of much
speculative following on the long side of
oil and railroad equipment stocks was
moot subject Of discussion in broker
age offices last month, and traders In
that category are those who retreat most
rapidly when prices begin to fiutter.
The Street unquestionably has been
impressed by the hopeful, and yet hesi-
tant. character OF new year predictions
In business and banking circles. A sum-
mary of views could be made in a
sentence to the effect that better results
are looked for In 1922 than were those
of 1921. but there are likely to be waves
CT Improvement and regression in the
first half of the year. Thought of that
sort probably had part In topping
stock prices over yesterday once the
trend was made plain In the second and
third hours OF trading.