Evening star. [volume] (Washington, D.C.) 1854-1972, 1927-06-26
BONDS CO LOWER
IN WEEKS TRADING
New Security Offerings Fail
to Meet Demand of Re.
cent Months.
BY GEORGE T. HUGHES.
Special Dispatch 70 The Star.

BY GEORGE T. HUGHES.
Special Dispatch to The Star
NEW YORK, June 25-The week
In the security markets has wit
messed only slight change in condi-
tons which prevailed last week.
Perhaps the most noteworthy Incl
dent has been the further reaction
In the stock market. The bond mar
ket can best be depicted by con-
ttnued lower levels for foreign obi
cations, further liquidation in some
of the second grade industrial issues
and a lifting of the pressure. which
for some time past has been pro-
nounced. against the better grade
domestic issues.
So far as the stock market was
concerned, speculative enthusiasm
received a severe check at the out
set of the week by publication of
the latest brokers' loans figures.
which established new peak record
for all time. An increase of $41. 000,-
900 on top of the substantial appre-
citation in the week preceding was
all that was needed as an excuse to
tighten speculative holdings.
Corrective Reaction Essential.
But it was question whether this
development was a real detrin1ent to
the market. The fact remained that
security prices had been put up to
q level where it had. become more
and more difficult to attract a real
public following. and the best opin-
ion was that a corrective reaction
was essential. 1t was generally con-
ceded that the expansion in brokers
loans was not due so much to the
speculation which had been carried
on in the stock market as 1t was to
the fact that new security offerings
had not met with the public re-
Spouse accorded a month and two
months ago.
Not only does this apply to the
market for new industrial offerings
but to the foreign issues offered on
a basis where the yield has been
even more attractive. In other
words, the slack in the investment
market has been taken up and the
syndicates have been forced to bor-
row at the banks in order to carry
the unsold portion of these offerings.
Developments in outside business
were not such as to encourage
further bullish demonstrations. The
steel industry has suffered rather
sharp decline and is now on an oper-
ating basis of approximately IS per
cent of capacity in the Pittsburgh
district. While this is generally adj
n1itted to be a seasonal falling off, the
industry as whole is on a basis APP
proximately 10 per cent below the
rate of June a year ago. Neverthe-
less the market for steel stocks has
held fairly steady, considering the
pressure exerted against other groups.
Ford Rumor Causes Stir.
Much has been heard during the
last week about Ford competition"
and what this is likely to mean to
other automobile manufacturers. De-
spite the official denial put out to
check the rumors of how the new
Ford prices were to compare with |
competitive schedules, they were |
enough to cause apprehension among
holders OF the motor stocks.
Efforts to stabilize the oil industry |
by curtailing output in the Seminole |
field so far have failed, and produc-
ton in this area continues to estab- |
lish new high records. The action of |
the oil stocks is indicative of the be. |
lief that a number of the independent |
producers. are likely to seek new |
financing to provide for additional |
storage facilities, and, judging by the |
action of the oil share market, APP
prehension is felt over how addi- |
tional financing along this line would
be received.
A slight hardening I'm the market
for time money has been noted, and it
is likely that this will become more
pronounced as the month draws to a
close. Loan calling, however. has not
exceeded normal proportions. but as
the time for July / interest and divi- |
dend payments approaches 1t Is logi. |
cal to expect the temporary with |
drawal of funds now available for |
stock market purposes.
Liquidation in Coppers.
Failure of an increased demand to
develop for the copper metal at the |
midyear period can be commonly set |
down as the reason for the liquidating |
which has been noted in the market |
for copper stock. Whether this will
find its reflection in the passing or
cutting Of prevailing dividend rates
later on is a question. Anaconda Cop |
per dropped to new low prices for the |
year. and, while lower prices for the
metal are responsible for the lower
rate Of earnings, net available for divi. |
dends is said to be well above require |
Ynents, and the usual quarterly rs
cents is expected at the meeting of |
directors Tuesday.
Railroad reports for May which so
far have come to hand make favor. |
able comparison with the month q |
year ago. So far as merger and uni. |
f1cation possibilities figure, it is hard. |
ly likely that anything along this line |
can be accomplished until after july
!. But it still remains for the Inter. |
state Commerce Commission to an.
prove one OF the proposals set be. |
fore it.
Price fluctuations in the whole COM |
modify markets this week, according to |
Dun's Review, again show a majority |
OF changes on the side of decline. OF |
the 81 alterations appearing in the
list. 50 were in a downward direction. |
This compared with 90 reductions |
against II increases in the week pre-.
ceding.
TnVTyEn Y1YrawRrz