The New York herald., 1922-11-26
FINANCIAL NEWS
AND COMMENT
Stocks Suffer Severe Setback
as Professional Pressure
Proves Powerful.


yesterday one of the most severe re-
actions that has occurred since the pres
ent downward swing got under way a
month ago. Notwithstanding large
district as a result Of the big football
games trading was on a very large
scale for a short session as measured
by the transactions which have been
From the opening to the closing OF the
two hour session there was scarcely a
pause In the decline and in tho last half
hour OF trading It reached its most
menacing proportions.
The reason for such q sudden and
violent break was not entirely clear.
There were no developments in the news
which would warrant any pessimism
which was not present yesterday. At
the same time foreign dispatches rather
seemed to indicate that the political
difficulties facing the biggest nations of
Europe are on fair way to smoothing
themselves out
What Is probably the real explanation
OF the break Is the present position
of the market in the hands of profess
sional operators. With the public in
terest virtually eliminated, except to
the extent to which public traders are
caught at prices far above present levels,
the market is almost entirely profess
sional affair. Such condition, coming
on top of a long sustained rise, Is apt
to result in series Of violent breaks
such as have been experienced In the
last month. Nor is there any indication
that the decline has been completed
There Is still no evidence of support
even at these levels and certainly there
is no present disposition on the part OF
the public to repurchase stocks. There
fore, professional operations always fol-
lowing the line of least resistance, II
seems a bit premature to suggest that
the bottom has been reached.
True, there has been no important
setback in the big business expansion
upon which the bull movement which
ran through most OF this year was
based. In fact, what changes have oc-
CURED recently in the important in
dustries have been indicative Of further
Improvement. Nor is there any sug-
gestion that the prosperity and activity
of American trade and industry will
not run for several months longer. But
the fact Is, and 1t has been so often
repeated as to seem monotonous now,
that the speculation which was built up
this year on the business Improvement
was grossly overdone and thax.the pres
ent recession, which at times like yes
terday becomes violent, Is but a correc-
tive measure which In time will put the
stock market back on a solid and SUBJ
stantial basis such as is warranted by
the condition of business ana financial
affairs the nation over.
There was no single group of stocks
which suffered more than others,
although certain individual issues
declined violently. Studebalxer was
notable feature. dropping to 116N, at
which fgure 1t was the lowest since
last May. In the oils too, particularly
the Standard Oil stocks, which have
been atsurdly overbought In the last
two or three months by reason of the
stock dividend fetish which Wall Street
has been worshipping, there were vio-
lent reactions. Standard OIL of New
Jersey sold SOME seventy points below
the high established not many weeks
ago
Dealings in bonds were comparatively
light, generally at slightly lower prices.
Foreign exchange rates were strong.
sterling selling within about one cent OF
its high mark for the year. and both
Belgian and French francs and italian
lire advancing above Fridays close.
Tho weekly Clearing House statement
was something of a surprise In that
instead of showing q sharp contraction
OF loans there was an increase Of moro
than s5.000,000. all of which occurred
in the latter days Of the week. As q
result the deficit in reserve increased to
more than s5,500.000.