Evening star., 1927-05-29
BOND RISE HA[TS
in WEEKS TRADING
Same Explanation Seen in
Huge Offerings of New Sc
!! I curity Issues.
BIZ GEORGE t. HUGHES.

NEW YORK. May 2s.--Develop
tnents of the past week in the flnancia
situation have resulted in little change
from conditions which prevailed g
week ago and for the past month. Sc
far as the movement of security prices
10 concerned, the stock market has alb
sorbed chief attention. 1t is note
worthy, however, that bond prices
have stopped their ascent. This ap
plies particularly to issues of the high
grade investment type selling on a
basis to yield from Az to per cent
and in numerous instances those in
which yield of as high as Ola per
cent still is obtainable.
This might be explained away on the
grounds that the enormous total OF
new offerings has given the BOND
market severe competition. During the
week these have reached a total of
Sf19.673. 900 compared with S205, $4,000
last week and S121 ,474. 900 in the same
week in 1925. For the present month
the offerings have been so large that
were it not for the Monday holiday
it Is not unlikely that May would es-
tablish a new record in bond financing.
while these offerings apparently have
been well absorbed, there is the sug-
gestion that the market Is becoming
congested and there are indications
that the new issues have not been
wholly distributed.
Then there is the feeling of uneasi-
ness over the money outlook which
might account for the let-up in the
demand for investment bonds. But as
the end of the month approaches the
usual tendency Is for rates to harQen
and il is improbable that higher Levers
are anything more than temporary, as
indicated by the recent remarks or the
Secretary of the Treasury.
It is an evident fact that the stock
market has offered the bond market
active competition, but this can hard
ly be ascribed to the belief that in
vestors are seeking higher yield in
stocks in the investment category. The
best explanation is that at current quo.
tations, stocks offer better chance of
price appreciation in principal, al
though so far as yields are concerned
the high grade dividend payers have
risen proportionately with bonds.
Foreshadows Stocks.
During the last few years the action
OF the bond market has foreShadoWed
the course of the stock list. Temporary
reactions in the former have been fore
runners to similar movements IN
stocks. 1t will be interesting to see
whether precedent is to be followed in
the present instance.
The market for high-grade dividend
paying railway stocks has gone ahead
uninterrupted with the average well
a. sc has ha
action of the Chesapeake & Ohio di-
rectorate in increasing the dividend
rate to SO annually furnished an add
ed incentive and has led to hope that
Atchison, New York Central, Balti-
more & Ohio and others where earn
tngs justify higher return will take
similar action in the not-distant fu-
ture. In the case of junior issues,
much is heard about contests for con-
troll and the probable uniflcation of
this and that road with one or another
OF the larger systems. But it still re-
mains for the Interstate Commerce
Commission to act favorably upon one
Of the many proposals submitted for
its consideration.
Copper Goes Down.
The quotation for the copper metal
during the week dropped to the lowest
for the year. Nevertheless. directors
Of CRANKY Consolidated saw fit to re.
sumo dividend payments. At the
same time, directors of Inspiration
Copper took less favorable attitude
toward the immediate future of the in
dustry and omitted their dividend. The
best opinion is that Improvement in
the market for the red metal will be
slow; and that toward the year end
consumption will make more than a
favorable comparison with that of
1925.
The commodity markets have offered
firm resistance to further lowering of
the price average. According to Dun's
Review. SO out of IS changes that ap-
pear in the. list of quotations have
been on the side Of advance. Higher
commodity prices naturally will find
their reflection in higher security
prices, but the fundamental influence
at the moment is the superabundance
of credits, nd there are no indications
OF any decided change in the near flu.
ture.