Evening star., 1924-06-12
SHARP STOCK RISE
HITS HEAVY SELLING
Traders Become Cautious After
Strong Rally at Opening
of Market.
RAILS AMONG LEADE.
Shipping Shares Gain-Advance in
Foreign Securities.
by STUART r. WEST.

Special Dispatch to The Star.
NEW YORK, June 1.-THE stock
market started in today with fur
ther lively advance following the re
Huction in federal reserve banl
rates. After the first hour it ran into
heavy realizing sales and became
highly irregular. In quarters where
the belief had been publicly expressed
that the situation had turned caution
was uttered against being in toe
much of a hurry to buy at rising
prices.
In the regular leaders there wa:
plenty of U. S. Steel common for sale
as il drew across 81. The same wa:
true of Baldwin Locomotive above
liz and of Bethlehem Steel around As
The market for the steels was bearing
in mind that, whatever may happer
later on, il must face Il series of de-
pressing reports for the Secont
quarter to be published next month
Also there was enough uncertainty
about the position of the sugar trade
to hold these stocks in check. Tht
oils moved with good deal OF lnde
ciSion. The increase in the weekly
figures on crude oil production, wa:
too Slight to be of significance
Railroad Stocks Active.
Railway stocks were quite as prom
fnent as the induStrials, but were also
subject to considerable variation
Union Pacific made a new high fol
the year around 1S5. Southern Pa
cific, New York Central, Atlantic
Coast Line and other standard divi'
dend payers were in demand for
time Southern Railway common
crossed 60 for the first time. The
buying in the preferred stock ap'
peared to be partly for investment
account. Erie was evidently meeting
lot of stock above IS.
Rock Island was conspicuouslH
strong among the low-priced rails, re-
flecting the improved earnings posi-
tion. Large transactions developed
in Seaboard Air Line, carrying both
preferred and common into new higf
ground Some special buying made
its appearance in Wheeling and Lake
Erie preferred, in Chicago and East
ern Illinois preferred, and in Ann Ar
DOR preferred.
Shipping Shares Improve.
There was a brief spurt in the
chipping StockS-Mercantile Marine
preferred, Atlantic Gulf and West In
dies and American International-bu
for no new reason.
The principal effect of this fresh
proof of superabundant money sup
plies was felt in the Investment mar
ket All classes of United State:
government bonds, with the excep'
tion of the tax-exempt rs, sold a
the highest ever recorded. The de
mand was keen for other strictly in
vestment issues, those, namely, which
are not affected by business fuctua-
tions. but which are valued By
changes in the money rate. The ad-
vance took in foreign government
securities, some of which touched the
highest of the year.
InaSmuch as it has been the more
recent practice of the Federal Re-
lead, the reduction from to 8 u pei
cent at New York and from az tc
3ls per cent at Boston was really
nothing more than an adjustment tc
changes which had already taker
place in the outside money market
The investment community let itself
become somewhat enthusiastic or
the idea that it was another sign o1
very low interest rates, and conse-
quently an advancing tendency in in
Vestment values for some time to
come
Short Sellers on Retreat
But on the stock exchange the
news was received more doubtfully.
The market had shown on the pre-
vious days that it had turned This
was evident from the failure of un-
favorable trade items to bring out
fresh selling, the result of which was
to make the short interest seriously
concerned about its position These
short sellers were in full retreat at
Wednesdays close. They would prob
ably have kept on buying in their
contracts today regardless of the out
side news. But, inaSmuch as the fed
eral reserve action fitted in conven-
iently, it was mentioned as one of the
causes back of the early strength in
the market.
Later in the day, when many of the
Industrial leaders began to hang fire
gain, more thought was taken of
the fact that Wall street speculation
has paid very little attention during
the last two years to money market
changes. Furthermore, the decline in
federal reserve and in money rates
must be looked upon as symptom of
diminished trade demands helping to
pile up surplus money supplies.