Evening star., 1927-04-17
TREND INDEC|S|VE
IN SECURITY PRICES
Preference Given New Bond
Issues During the
Past Week.
Special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK. April 16.-The move.
rncnt of security prices this week has
been indecisive. Investment demand
p holds quotations up around the highs
of the year. hut buyers refuse to ad,
vance their bids above prevailing
levels In other words, the immedi
ate future in both stocks and bonds is
uncertain.
As far as bonds are concerned, the
preference has been given this week
to new issues, practically all Of which
have been quickly absorbed. notwith.
standing the fact that many Of them
were sold ON n lower yield basis than
at any time since the World War.
The stock market has been TWO.
sided affair. Shares of companies with
demonstrated earning power hacked
bv large equities have pushed ahead.
while others. representing industries
suffering from overpvoduction or eX-
cessive competition. have been de.
pressed The probabilities are that
tha first class has been marked up
somewhat eytravaCantlv and that the
others have been sacrificed at figures
not representative Of their real value.
But that is the distinguishing char
acteristic of this market. The line be-
tween the strong end the weak has
been very sharply drawn
Money Situation Fundamental.
ANY complete analysis Of the situa-
tfnn therefore must go deeper than the
surface indications given by dRy-to.
dav fluctuations in security prices. II
genora1v is agreed that the funda.
mer+a' e prime Importance in all tho
T.q~l,o- today is the money situation.
L 4 /. y-4A4 nc
charged for. fixed pe1its accommoda-
tion. Call loans. which are Of Inv
most interest TO spectators. are
shade higher, but not enough to af.
feet sentiment, and. judged by rec
ords Of the past, are really Yerv low
The supply is ample. not only for
Wall street borrowers. but for lcgtu-
mate business IS we'll
Bearing on this point. the figures
made public by the United States
Treasury are illuminating. They show
that on April /, the United States held
the largest supply os monetary gold
ever accumulated by any country in
the history of the world American
holdings of gold now amount to al-
most exactly so Der cent of the total
world supply. Until this huge mass
OF gold begins to be redistributed, any
material disturbance OF values in the
better grade of securities is unlikely
in the extreme.
Commodities StabiIizing.
Commodity prices show signs of
stabilizing after their long decline.
There are exceptions, of course, most
Of them in foodstuffs. but others are
hardening so that the average is about
the same. Sugar is improving some.
what. Copper has stopDed going
down. Iron and steel are the same as
a week ago Crude oil is the veal:
spot and here further cuts are possi-
ble, according to those hest informed.
There have been some further reduc-
tions in prices asked for motor cars,
but the next change I'm the tire indus.
try is expected to be on the side of
advance.
More or less securities representing
4he various industries have f'uctuated
in sympathy with the price outlook.
Sugar stocks and bonds. for instance.
have been favored. while oil obliCa.
tions have been depressed. Business
men are still observing the cautious
policy embodied in so-called hand-to'
mouth buying AS long as this contin.
ues, hasty liquidation of goods is, of
course, out Of the question.
Markets Technical Aspect.
Finally, we come to what may be
= called the technical aspect OF the mar
ket An excessive output of new Sc
curities might asily prove disturb
ing element and this is something TO
be carefully watched. So far, how
ever, there is no sign of danger from
this source. On the contrary the APP
petite of investors for desirable Of
ferings is a standing marvel to bank
ers and dealers alike. From the specu'
lative viewpoint it is automatic that
prices cannot always move in one di-
rection. Nothing is surer than that
some times quotations for stocks,
even of the best of companies, will be
lower than they are today. No mar
ket is more perilous than the one that
reflects the opinion that nothing can
stop an already prolonged advance.
Such markets collapse OF their own
weight and generally Unexpectedly.
But Wall street is bearing all that
in mind, and counsels of caution be-
sprinkle every market letter that
brokerage houses send out. Probably
there are more professional specu-
1atorE today looking for decline than
those who are confident Of fresh
advance. A good many of them have
backed their opinion with their money,
all Of which helps keep the market
up. Summing it up, there is no &C.
casion for alarm about the market
status from the attitude Of the trad
ing element.
Values Well Maintained.
Railroad stocks have not been quite
as prominent this week as last, al
though values have been well main
tained. In a few days now the March
earnings statements will begin to ap-
/, pear, and. Judging by the carloadings
reports, they are likely to make a
favorable comparison with those of
year ago. Meanwhile annual reports
coming out make pleasing reading for
stockholders.
The Atchison 1926 statement is
case in point. Operating revenue for
1926 was higher than ever before, the
increase amounting to 9.33 per cent
over results a year ago, while net
available for dividends and surplus
was 3l.3J per cent. The gain came
entirely from freight receipts. Pas
seuger income showed a falling off,
but railroad men are Of the opinion
that automobile competition, which is
the cause of the drop, has now reached
iCs climax and that hereafter income
from this source viii be maintained,
aaS