The New York herald., 1922-10-24
FINANCIAL NEWS
AND COMMENT
/ to z Point Losses Suffered
by Most Stocks at Low
Levels for Session.

The stock market was called upon
| yesterday to absorb a vast amount OF
| selling. but because of the extremely
weakened technical position OF the gen.
eral market il was unable TO do SO
except at the cos. of a substantial de-
cline, which ran from one TO more than
seven points at the days lows. A similar
heaviness characterized the bond, cotton
and foreign exchange markets. Grain.
on the other hand. was fairly strong.
II was inevitable that the Incorporate
speculation in stocks during the last two
or three weeks. based on nothing more
than big stock dividends declared by
SOME companies and hopes of similar
action by others, would undermine the
market to the extent where any con-
certed profit taking movement or any
raid would force it much lower. The
wild advance of some of the high priced
stocks during that period has done two
things: II has frightened the public out
of the market for a time and to that
extent has left the market in an exceed
ingly vulnerable position, while at the
same time It has eliminated in large
measure the short interest which always
can be counted on for substantial abb
sorption in the case of sudden and inn
portant liquidation.
Up TO a few weeks ago the stock mar
5et had had pretty steady advance
and it's technical position thereby greatly
weakened. Then a corrective movement
got under way which took prices down
several points from the highs. The
necessary correction seemed well on the
way to Sompletion when the stock divi-
dend fever struck the market and there
was wild, reckless buying of everything
l.. 20
a stock dividend
All the good that had been done has
once more been undone, and it is quite
likely that yesterdays downward trend
was but the beginning of another cor
rective swing, which will be ended when
the market is once more on a safe. sound
and stable basis. The stock market has
been advancing pretty steadily now for
about fourteen months. and 1t Is much
easier to weaken the understructure now
than it would have been few months
ago. when the general list was at much
lower levels.
Led by French francs, foreign ex-
change rates were also under sus-
tanned pressure Francs made a new
low mark for the year around 7.1O, the
lowest since early last December. and
their extreme weakness on top of sew
eral days of steady decline served to
nnsettle the rest OF the European
rates. Marks. however, did not get
Down TO their previous low. Sterling
rates were off about / "A cents at one
time. but this was scarcely more than
a natural reaction based on the sharp
n5vance of the LAST fortnight and the
acute weakness In francs.
Selling of French currency Is largely
in anticipation OF some uneettling facts
becoming public when the Chamber Of
Deputies meets soon to take up the
question of Frances budget. which. it
is admitted, viii not be balanced. Some
fear is expressed, too. that the French
Government will adopt a steady policy
of borrowing, with consequent infla-
ton. to meet the deficit which is sure
to arise.
Cotton prices continued their upward
swing of last week in yesterdays early
trading, and all options made new
high figures for the year. The market
later ran into some heavy profit TAX
ing. however, and the result was q
small net loss on the day. Grain
prices were fractionally higher.
In the bond market trading was
very dull and price movements narrow
and without significance. Most Liberty
bonds lost a few cents on the day.
There is still much uncertainty re-
garding the future course Of the bond
market. The question is yet unan-
swered as to whether the banks and
other big institutions and corporations
have completed the selling which they
have been doing for weeks to provide
funds for expanding business
Money rates showed no important
change. Call loans on the Stock Elk
change were Az per cent. all day. and
any preparation which may have been
made for the big Government with
drawal to-day was conducted without
causing any furry in the market.