Evening star. [volume] (Washington, D.C.) 1854-1972, 1927-07-10
STOCK EXCHANGE
INTEREST CENTER
Tendency in Bonds Toward
Firmness in High-Grade
and Speculative Issues.
HY GEORGE L. HUGHES.


NEW YORK. July 9.--The movement
Of prices on the Stock Exchange has
held the center of interest in the finan-
cial situation this week. The reaction
al.v tendency throughout the greater
| part of June resulted in a depreciation
| i'm total stock values of more than
| S735 900 900. The beginning Of July
| was accompanied by turnabout in
! the main body of stocks which con-
| tinued throughout the past week. al
| though numerous prominent indus
trials and railway shares failed to
maintain all the improvement to the
| end.
II was evident that the June reaction
had materially corrected the technical
position and that stocks We're III
position again to respond to further
h,lving operations. Much has been
heard about the reinvestment of huge
midyear interest and dividend pay
ments. Because of the prevailing low
Yields obtainable, even in the more
speculative bond issues, it is reason
able to assume that good part
of these funds will find their way
back into the stock market. But how
much of the recent demand for stocks
can he attributed to this class of buy
| ing is Il question
Ease i'm Money Situation.
| The chief consideration in the opera
lions for the rise so far this year has
| been the ease in the money situation.
II is true that brokers' loans for the
month of June increased some Slll,-
| 900 900 to a total of S3,56S,96b, S43.
| which brought the amount to the
| highest on record. This compared with
| the previous peak of $3.50 .53O,32l,
| recorded at the end of February, 1926,
| lust before the elimination of the bull
| campaign, which started the previous
| October in the motor shares. But it
| is reasonable to assume that much OF
| the latest increase could be set down
to the enormous fiotations of new is
sues which came upon the market
early in the period.
Speculative Wall Street has been IN
clined to ignore the weekly increases
from time to time in brokers' borrow
ings, and the latest disclosures evil
IDENTIFY have failed to have material
effect upon calculations as to the inn
medite future movement of prices. So
long as money for stock market pur-
poses remains in as plentiful supply
as it is at present, the element faVor-
ing higher prices expresses little or no
alarm over the tendency of brokers'
| loans to expand. Call money during
| the past week has dropped back to the
| per cent rate for renewals and has
been reported available in the outside
market as low as go per cent for new
| loans. Time funds remain easy at
Az per cent. to AS per cent. and the
| outlook at present is for continued
| ease for some time TO come.
Tendency Toward Firmness.
| In the bond market the tendency of
both the high grade and speculative
| issues has been toward firmness. Sew
eral of the newly listed unseasoned Of
| ferings have suffered rather shary de.
clines and this has commonly been at
| tributed to the dissolution of various
syndicates. New bond offerings for
the week have shown another falling
off to a total of $43, SAB 900, which rep
resents a new low record of financing
| for the year to date and compares
| with a total of $4S.225. 900 last week,
| the previous low figure.
This development empha sizes the
| congestion which has come about in
| the market for new financing. although
| there appears to be an abundance of
fresh offerings which are being with
held until the market gives some indi-
cation of having absorbed good part
of the recent issues which still remain
| in the hands of syndicates.
| The steel industry is experiencing it's
usual periodical slump, which many
are inclined to consider more than sea-
sonal. Nevertheless, the market for
the steel shares has held up compare
lively well as the industry enters the
second half year. Considerable uneasi-
ness is felt over the severe competition
| prevalent in the motor industry. and
| there Is a tendency to look for further
price cutting later on. Efforts to cur.
tail the tremendous output of domestic
| crude oil so far have failed of their
purpose but there is a disposition on
| the part of those favoring higher price
for the oil stocks to believe that liqui.
dation in this group has been thorough
and that any change must be for the
| better.
Commodities Work Higher.
The commodity markets have work.
ed higher, but the Improvement has
been only gradual. Spring wheat has
been affected by reports of a black
rust scare, but so far there have been
no complaints of deterioration. A bet.
ICONDTTT0MOE Al