Evening star. [volume] (Washington, D.C.) 1854-1972, 1928-02-11
Market Holds Up Well.

II that In spite OF the obvious enort
now being made to check this sort OF
operation by means OF higher Federal
Reserve Bank redscOunt rates ana the
sale of Government securities, there con-
tlnue to be almost daily advances OF
large proportions in different parts OF
the stock list. A decided reaction in the
market was anticipated when 1t became
known that the Federal Reserve Board
finally had adopted a policy Of higher
money In order to check the imitation In
securities and the volume OF brokers
loans. There have been declines, to be
sure, but not as extensive as predicted.
It may be that the market will be slow
20 react TO the pressure on 1t from
banking quarters as 1t did in 1925. Then
there was an interval of about go days
between the advance in the rediscount
rate and the collapse in prices started
by the adverse Interstate Commerce
decision in the Chesapeake & Ohio case.
Conditions today are better than they
were then. at least so far as the sub
structure OF the market is concerned.
The public was badly extended at that
time while today it has trimmed its
sails and has large reserve OF liquid
funds available to take advantage Of the
break in prices which 1t hopes will
some day develop. The call money mar
ket is full of funds placed there by
those who have realized their profits
from the rise OF the last few days and
are holding them in reserve to reinvest
at an opportune time.
New Issues Affect Loans.
More stocks have declined this week
than have advanced. For this reason
II Is difficult 10 explain the new high
record in brokers loans on any other
basis than that 1t Is being affected by
new issues OF securities. Such issues
have SO far this year amounted to over
$1,000. 600. 900. This Is an aspect OF the
case that the Senate committee should
carefully Investigate. Adding the aver
age loss in prices since last Saturday
to that OF the previous week. We have
one that is 10 points below that of last
October. This Is not much change for
market that between January, 1927.
and the end Of September. had an aver
age advance OF so points.
There are individual groups OF stocks
however. where the losses have been
much In excess of those displayed by
the general average. In analyzing the
stock list closely this week. some very
significant price movements are dis
closed.
Take for instance. the rails whose
best prices we're reached last Summer
before the sharp decline In earnings
set In A list Of IS members OF this
group. including the investment issues
and those that were buoyed up by the
expectation OF merger benefits. showed
an average decline Of 81 points from
me nigh OF last year This average was
influenced considerably by the decline
OF % points in Delaware e. Hudson and
81 over so points III Ichigh Valley.
Eliminating these two stocks the loss
amounts TO about II points.
Industrials Show Loss.
Another group represents IS of the
outstanding investment intiustrisls
which the investment trusts of GER
tain type take much pride In detailing
AZ being carried in their portfolios. The
stocks selected were last year selling
above 100. The average price Of the
group would be between 1885 and 100.
Every one Of the issues in recent times
iias been actively In the eyes of the
trading public. II includes General
Motors and United States Steel. This
week this group shows an average de-
cline Of 20 points from the high of
1927. with the one exception of Mont
gomcry Ward. each stock shows loss
third group Is composed OF 20 auto
mobile. accessory and tire companies
The average decline In these shares Is
10 points. although since the first OF
this year there have been days when
new record prices In motor stocks have
been widely featured. Not n few OF
the smaller companies In this list have
seen the quotations for their shares re-
dueed so per cent III value from the
oil Stacks Suffer.
No industry has been through more
dineult times In the past - months
than that devoted 10 the production
and refining of oil. Oh stocks have
made several false moves. For the
most part they have suffered severe
feverses and 10 active members OF this
group are today mn average OF 10
points below the high of last YEAR
The independent iron and steel conf
panlea, The sugar producers and rei,n-
efs, the manufacturers ot textiles, the
meat packers and certain al the NOV
Ing picture companies. all reflect IN
the securities period Of unfaVotable
business, which In some cases Is most
acute at the moment and In others Is
on the mend. Like in the other groups
described above. there has been ,iras-
tic REIMBURSEMENT IN the prices of their
securities 10 the changed conditions In
their business life
1t viii be gathered from this review
that there already has been fair
amount OF response to decreased earn
ings ~ trade and VI transportation and
That the altting process through which
me market has been moving has I'M
proved Its technical position materially
Against this there are The evidences
OF Imitation that have occurred recently
III various public utility. express com
i'any aud trade mark concerns aud In
some Of the metal shares ON alleged
discoveries OF hidden values which are
lust now helng uncovered,
husiness Improvement Noted,
There no doubt will he n careful St.
lection III steaks by those who are iden~ |
tiiird with tuarket movements resulting
III The aanhe snrt oi opposite tendencies |
~ prices that have been conspicuous
Throughout this year II II were not for j
The loan situation which must he cor |
teated and The undesilah,Iity from a |
rnlitioht standpoint at continuing the |
market at u high average price level |
into The period 81 tho active preslsieu.
tial campaign, with the possibility of a !
market break Just when II would he |
most embarrassing In the campaign man. |
aGets, one might hook tor better prloas |
on the hasia ot al Improvement IN bust. |
nrsa
Tie evidences ~ such Improvement |
arc INCREASING Not only are They IA he |
found III tho iron aud steel trade where |
plo.iuction has maved IN from do per |
cent ~ IA per cent IN leas than iva
months, hut IN variu,is either directions, !
all Ok which n seasstsa IN \ wssk.ey-