Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-01-25
.UPTREND IN STOCK
!. PRICES FORECASTS
. BETTER j. S. TRADE
Feeling of Confidence RepIac-
ing Fear in Financial
World.
CLOSE OF LIQUIDATION
IN MARKET is NOW SEEN
List Presents Sold-0ut Appearance
With Many Issues Lend.
ing Fiat.
BY CHARLES F. sPEARE.

BY CHARLES F. SPEARE.
Special Dispatch to The Star.
NEW YORK. January 24.-The grow
ing opinion that business in this coun-
try has touched its low level and that,
while it may be at dead center" for a
time it will begin to point definitely up
ward in the Spring, has been supported
this week by the action of prices for
stocks. Pronounced strength has been
exhibited in sessions that were sub-nor-
NAL with respect to the volume of trans
actions.
One after another of the unfavorable
reports on corporation earnings for 1880
have been analysed, and in nearly every
case Wall street has come to the con-
cluSion that they were discounted in the
December low stock average. Additional
failures of investment houses interior
banks and manufacturing companies
have made no impression on minds that
brooded deeply over such events a
month ago.
The absence of any definite signs of
Improvement in the industrial world,
except such as would represent the
minimum for the season, has not pro-
duced the anticipated discouragement
among investors. January, in fact, is
passing out with calmness and conf
dence in banking and business circles
greatly in contrast with the universal
fear prevailing all through the month
of December.
End of Liquidating.
This change of sentiment comedies
with the end of the liquidating move
ment in securities four weeks ago. It
was later strengthened by the remark
able exhibit of cash and other liquid
efn - -
trust companies published early in Janu-
airy. Then it found announcement in
the optimistic outlook into the future
taken by such men as Paul M. War
burg, Albert H. Wiggin and Charles E.
Mitchell, to be later supplemented by
equally strong convictions from in
dustrial leaders like President James A.
Farrell of the United States Steel
Corporation and Owen d. Young, who
believe that turn has come. The more
recent analysis of the Federal Reserve
Board confirms their views.
Organizations whose business 1t is
to probe into the facts of corporation
life find that the pulse of business
Is beating a little faster, but that it
VIII require a period of some months
more OF rest before industry can stand
strongly on its feet.
Not all, however, are confident that
the stock market can escape another
substantial reaction before finally
throwing of the effects Of a year and
half Of depression and moving stead
lily forward. The trend at the moment
is toward the cheaper classes of indus
trial shares, say those ranging from
$40 to $40, which have been reduced
as much as IS to 80 per cent from
market values in 1929, still pay divi-
dends and yield an average Of around
8 and 10 per cent.
Rails Back In Favor.
It Is not improbable that we may
see lower quotations in the relatively
high priced shares coincident with a
stable or rising market in the cheaper
varieties. So far as railroad stocks
are concerned, they appear to have
definitely shaken of the nl-favcr that
formerly attached to them AS there
have not been nor are likely to be
many changes in their dividend rates,
the rails continue to offer the highest
average return at the lowest average
risk CT any single group. They also
show the traditional tendency to follow
along in the wake Of a rising market
for senior securities.
Treating the stock market from the
technical standpoint, it may be said
that it has decidedly sold-out APP
pearance.
At no time within the memory of
the present generation of brokers until
now has the entire New York Stock
Exhange list Of shares been quoted fiat
or at premium This condition has
prevailed for over three months.
In large measure, 1t is an evidence
that many people have sold what they did
not own and what, some day, they will
have to deliver promptly or pay the
penalty.