The New York herald., 1922-06-18
FINANCIAL NEWS
AND COMMENT
Irregularity in Stock Market
Shorts Cover in Squeeze
at the Close.

Movements in yesterdays stock mar
ket were mixed to an extraordinary de-
gree and were without special signifi-
canoe in most cases. News develop
ments. in so far as they had an mpor-
tant bearing on stocks. were conspicuous
by their absence. and technical factors
were almost entirely responsible for the
moves mp and down. During the early
part of the session the outstanding fea-
ture was a softness in the general list.
which made 1t no less vulnerable to as
sault from bear quarters than it has been
all through the last week. One or two
exceptions-to this condition-notably
Mexican Petroleum only served to
magnify the apparent early weakness in
the rest of the list. Trading during the
first part of the session was moderate in
volume. and indicated that most public
traders were needing the advice of a
large majority Of commission houses,
which exhorted their customers to keep
out of the market until some more def
mite indication was given that the bot
tom had been reached.
A sharp covering movement got under
way in the last hour of trading and
some of the speculative favorites In
which an exceedingly large short inter-
est had been built up were put through
all the motions of real bull swing.
Mexican Petroleum was the outstanding
feature here and with the short side so
crowded that there was scarcely room to
move about, the group interested in ad-
vancing the price Of that stock had no
difficulty whatever. The news that
Mexico had come to an agreement with
the international committee of bankers
With relation to her external debt was,
OF course, used as lever to get the
move in Mexican Petroleum under way,
but that news was an excuse rather than
a reason for the move. The only pos
sible bullfsh argument so far as oil
stocks were concerned that could be
drawn from this news was the indica-
tion that the Mexican Government was
disposed to hsten to reason in connec-
tfon with it's deals with other nations
But so far as oil is concerned, that was
indicated as long ago as last fall. when
five of the biggest oil men in the In
dustry weht to Mexico City to confer
with Government officials. 1t was OBJ
vious. therefor. that the Mexican news
yesterday morning was used to give the
shorts one of the most severe punish
ments they have Experienced In months.
News of further reduction I'm rail-
road wages was not entirely unex-
pected and for that reason had little
effect on the prices of railroad shares.
Some rail stocks advanced while others
were declining, and at no time during
the session did they appear to move as
a unit. There were other issues, besides
the Mexican oil stocks, in which an
overcrowded short interest was driven
in and substantial gains were recorded
in these quarters, too. Crucible Steel
was a particularly good example of op-
erations of this character and Midvale
Steel was not far behind. but the real
buying power which may be expected to
come into the market. when the public
is convinced that the liquidation of the
last week has been completed. was still
absent. The general feeling among pro-
fessional followers of the market is
that the correction OF the oversold con-
dition of the market has been COM
pleted. but it will take a little time to
convince the public to that. effect, and
until the public is thoroughly convinced
there can be no resumption on a broad
scale of the upward swing.
The foreign exchange market failed
to show any ralIying power, and con-
tinued speculation for the decline was
once more successful Sterling regis
tered another drop of more than 2
cents. to 4.43A, and francs made a
new low for the year at s.65. off sia
points on the day Lire. too. We're weak,
declining Z points. to 4.91, and Ger
man marks sold close to their record
low at 307s.