Evening star., 1923-04-03
STOCKS IN REBOUND
AFTER SHARP DROP
Bears Make Another Big
Drive Against Market Dur.
h ing Noon Trading.
ny STUART p. WEST.

nY STUART p. WEST.
srecial Dispatch to The Star.
NEW YORK, April 3.--What was
obviously another drive against the
market occurred midway through the
forenoon today. 1t had the effect OF
creating considerable unsettlemen,
for a while and brought out a good
deal of liquidation on stop orders
Then about noon the decline was
checked, partly by supporting orders
thrown into a number Of selected
stocks and partly by the covering ir
OF profits made by traders on the
abort side. The recovery was quite
ss sharp as the preceding decline.
In half an hour Corn Products. eN
the quarterly dividend. went from
t22A to 125. Other industrials which
had been similarly under pressure re.
bounded in many instances a point OIL
more.
hallway List Stronger.
The railway list did better partly
because OF the improvement in Unior
Pacific and partly because Of the sud
den run-up in Canadian Pacific. There
was no particular reason why Cana
dian Pacific should have been Sc
iected as the leader except that il
represents a Canadian road not under
the cloud OF threatened adverse leg
islation like the American carriers
But with the help of a short interes
and a narrow market, the stock wa!
run up across $50. which had been it:
previous top of the year.
Union Pacific in the meantime ral-
lied sharply and less was heard
about a possible dividend reduction
at the meeting next month. The
margin of safety to be sure Is not
ming, between sls.5o and SIS where
$40 Is being distributed. But WITH
general business and traffic condi-
tons as they are dt would be g
the, Union Pacific. directors to cut
their rate now after having main
tained full payments through the era
OF depression.
Review and Outlook.
The point most Immediately before
the Wall street community today
was whether or not the stock mar
ket during its decline of the last two
weeks had gone far enough with its
corrective process.
A simple comparison of prices show:
that at the lows of Monday and thii
morning the greater part of the list
had lost all the advance OF March
and a good part Of the February rise
as we'll. In a word, for the majority
of stocks. two-thirds of the entire
gain since the first of the year wa:
wiped out.
This was certainly verv generous
atonement for the speculative eX.
cesses of the last two months. There
was no convincing explanation fol
so large a setback in the facts of the
business situation, Undoubtedly Wal
street at the height of its enthusiasm
g month ago was exaggerating these
values No doubt. too. it had no,
taken proper account of such mat.
ters as wage increases and rising
costs of living as in first, which
might prove troublesome later on.
Better Investment Tone.
A somewhat better tone was report.
cd in the investment market despite
rather plain signs that the supply OF
money at present quotations, both or
constantly diminishing; in other
words that the banks are more and
more inclined to hold off for better
terms. The foreign exchanges went
lower all around Sterling at one
time was down nearly s cents in the
pound from the seasons high. and
French francs were off nearly a halt
cent from the top reached in last
months sharp but short-lived up
swing.
The recent offering of a block of
100000 Z per cent preferred stock
Of the American Water Works and
Electric Company has been meeting
with success, according to reports to-
day. and this fact, together with the
understanding that the forthcoming e
earning figures will show increasing
net income available for dividends,
has accounted for tho firmnesS of
water works stocks. especially the
common. The purchasing preferred
recently went on the dividend list
with the payment of 81 quarterly
dividend.
American Cotton Oil.
y pointed out pressure was exerted
again today against American Cotton
Oil preferred. which sold at It's low
for the season. AS shown in trade
reports. company earnings and also
in the recently Issued statement of the
Virginia Chemical Company, also en-
gagged in cotton oil business. income
from the sale of this product Is in
adequate at the present time. and
enough people are taking cognizance
OF this fact 10 affect the market for
American Cotton OIL preferred.
Stocks Rally Easily.
When the market turned upward
the lead. The Pan Americans, which
had been very weak in the early
part of the day. rebounded very
sharply
The pools in Marland OIL and Phil
lips Petroleum, once the general
market gave them the chance. bid
up their specialties again. Mack
Trucks was another specially that
came back with noticeable ease
1t took very little buying to bring
about a substantial gain in East
man Kodak.
Shorts Cover Quickly.
1t took another hour or more OF
professional experimenting on the
short side of the stock market to con-
vince this class of operators that they
in their turn had been CARRYING
things too far. When 1t was discov-
cred that real liquidation had run its
course and that there was a good deal
OF buying back of stocks distributed
a month ago sentiment underwent a
swift change.
The ease with which prices rallied
in the afternoon was pretty good
proof that il the campaign for higher
prices in its later stages had con.
tained a large element OF artificiality
the same was true of the bear
speculation of the last few days
The statement made at the Stude-
baker annual meeting that first quar-
ter earnings would exceed $4,000. .00o
or about 81 a share on Studebaker
common stock, came as a timely bit OF
evidence that accounts of the pros
perity in the motor industry have not
been overdone.
Copyright, 1929