Evening star. [volume] (Washington, D.C.) 1854-1972, 1927-07-24
SECURITY PRICES
CONTINUE TOR|SE
Weeks Trading Sees Gains
in Stocks and Bonds.
Credit Is Abundant.
BY GEORGE T. HUGHES.

BY GEORGE T. HUGHES.
Special Dispatch to The Star.
NEW YORK, July 23.-The week
Just closed has been characterized by
steadily rising prices In stocks, inter.
rupted only by some irregularities at
the end, firming up of quotations in
bonds but without much increase in
activity, the easiest money market of
the year. to date and indications.
slight but significant, of improving
business.
The rise in stocks was a continual
ton begun in the previous week
and was remarkable for the num-
Der of consecutive days that elapsed
without reaction, technical or other
wise. There were weak spots but
they were less numerous than in other
markets earlier in the year. More
over the market seemed able to absorb
profit taking with surprising readiness.
The most reaSsuring feature, how
ever, was the lack of excitement over
the proceedings. The danger sign of
rapidly rising prices distributed uni
formly throughout the list accom-
panied by increasing activity did not
appear. Nothing in the action of the
market itself gave any evidence Of
any approaching change in trend.
Superabundant Credit.
The all powerful influence, of
course, was the superabundant credit
For the first time this year call money
renewed on Friday under 4 per cent
while on the preceding day new loans
had been arranged at 31a per cent, a
figure only equalled once before, in
1927, on March Is. Even lower rates
were obtainable in the so-called out
side market. Not only this but time
money was easier and there was a
decline in acceptance rates. The
weekly statement Of the Federal Re-
serve showed a small increase in the
reserve ratio for all the IL banks, but
a very large increase in the ratio for
the New York bank. In both cases
the figure Is higher than it was a
year ago at this time. Loans of New
York City member banks to brokers
were off only slightly on the week,
but this followed very heavy reduc
ton in the preceding week. AS the
Autumn approaches an increased de-
.mand from the interior is anticipated
but 1t has not made an appearance
yet.
The bond market has been firm but
dull. Low money rates have excited
only a moderate influence on quota
tons. Still the market is much
Steadier than it was last month. 1t
has been helped by the dissolution of
syndicates holding unmarketed por-
tons of new bond issues and the
resultant readjustment in price. There
are still a few of these SyndicateS to
wind up. One of them, that in the
Phillips Petroleum 5K per cent bonds,
dissolved this week and the quotation
dropped abruptly with partial recov-
cry afterwards. New offerings are
increasing but not in any large degree.
Stocks Are Preferred.
Meanwhile the investing public pre-
fers equities, that is stocks, to obliga
tons of indebtedness, that is bonds.
The advance in the market for some
of the high-grade industrial stocks has
carried them to a point where the
return to the investor at present diyi-
dend rates offers little advantage over
bonds. The rise has not been checked
by any consideration of this sort
simply because in the prevailing mood
of the financial community the long
range outlook for business is con-
sidered bright. This applies only to
the leaders in each line of trade. 1t
is admitted that the small units face
sagging commodity price scale.
AS for business, reports from the
iron and steel trade are moderately
encouraging. The price situation
shows some improvement and it is
hoped the seasonal turn is near at
hand. The copper market is better,
fact that has been reflected in the
market for copper stocks. For the
moment commodity quotations are
reasonably steady. Dun'S Review re-
ports out of ~ changes an exactly
equal number of advances and de-
clines. The number of failures for the
week is below that of a week ago,
although in excess Of those for the
same time in 1926. In the oil trade
there is a note Of Encouragement.
Oil Output Heavy.
There is still huge over production
OF oil and even the strong companies
are faced with the necessity of financ-
ing to provide storage charges for the
excess output. This has not made
much difference with oil stocks be-
cause most of them have been sold to
a standstill. Standard Oil issues have
been noticeably firm, probably on the
theory that the situation is so bad it
cannot get any worse.
Next week the June earnings state
ments of the railroads will appear in
volume. One or two came out late
this week showing some falling off as
compared with June of 1926. Probably
that viii be the trend Of the majority
of the roads. 1t is not likely to be
disturbing to the market for railway
stocks, however, as it is believed the
showing late in the year win be better.