Douglas daily dispatch., 1926-08-14
MARKET DROPS,
THEN SCARS AT
CLOSE OF SALES
Stock market average
Total stock sales, 1,7O6.2OO.

i
! NEW YORK, Aug. 13-Stock prices
broke sharply today on unexpected in
crease in the New York federal reserve
re discount rate and then developed a
surprising outburst of strength, which
wiped out most of the earlier losses of
1 to 10 points and sent dozens of issues
1 to points above yesterdays final
quotations. 1t was one of the most
complete reversals of form in recent
stock exchange history, and had a be-
wildering effect on many traders and
investors.
wall, streets first impulse today was
to sell stocks on the theory that the
"good news" on General Motors di-
rectors of which declared SO per cent
stock dividend yesterday, was out and
that the higher bank rate would be
construed by many as a check on ex-
travagant speculation in stocks. The
nervousness of traders, made apparent
by the erratic fluctuations in many is
sues in the early trading, was taken
advantage of by professional shorts,
who succeeded in touching off num-
ber of "stop loss" orders resulting in
precipituous declines in some of the
high priced specialties.
While little effort was made to bid
up the high grade industrials during
the morning, it was noticeable that
they received good buying support on
the "dips" and that there was little
urgent liquidation of large lines of
long" stocks. When strong invest
ment demand appeared in the rails,
which carried Atchison, Baltimore &
Ohio, Norfolk & Western and Southern
Railway, preferred, to new record high
prices, an active covering movement
started in the industrials. Sudden dis
plays of bullish enthusiasm in Amer
lean Smelling, General Electric and
other industrials which had not shared
extensively in the recent upswing, sent
the shorts in these and other indus
trials scurrying to cover, closing prices
generally being at, or near the high
levels of the day.
The weekly mercantile reviews re-
ported a further Improvement in bus
mess despite the intense heat in many
sections of the country. Stress was
laid on the fact that in no other year
at this time have the major industries
shown the same degree of activity and
vitality as now; but fall buying was
nevertheless characterized as conser-
vative, although there was good prom
ise of further commercial expansion.
The confused price movement in the
stock market is well illustrated by the
fluctuations in General Motors, which
opened one point lower at 2O2A, sag
ged to the 200 mark, rallied to 2O3,
broke to 1861, climbed back to around
the 200 mark by early afternoon, and
then spurted up to 208 for net gain
of AZ points on the day. United States
steel. common, showed net gain of
28k at 1853 after having touched 148.
Dupont rallied from 2S7 to SO2 and
then slipped back to 800, up 5A net;
U. S. Cast Iron Pipe rallied from 228A
to 2S6A and Case Threshing from
1863 to III, and then back to 1854,
up points net.
American Smelling was one of the
late features, soaring points to 1471a,
the highest price since 1907. American
Brake Shoe and Foundry closed 10
points higher at las, and American
Wooden, common and preferred, Brook
| lyn Union Gas, General Electric, Ma
tional Lead and Sloss Sheffield Steel,
were among the many issues to show
net gains of points or more.
Call money held steady at Az per
| cent all day, although banks are re-
ported to have called about $15,O00,OOO
! in loans. Time money was in greater
demand and a stiffening price tendency
was noted for the longer accommoda-
tions. Commercial paper rates We're
unchanged.
Commodity markets showed little
change. Wheat futures yielded frac-
ton of a cent a bushel after an early
rally based on the unexpected strength
| in foreign markets, and petered out
Cotton options closed II to 19 points
! net higher, after touching new low
levels for the movement Raw sugar
was unchanged and coffee prices held
firm. With the exception of slight
weakening in sterling exchange, de-
mand bills ruling quarter of cent
lower, around $4.S52s, there were few