Evening star., 1931-12-29
RALLY HALTS DROP
IN STOCK MARKET
Industrials and Utilities Lead
in Upward Trend-RaiIs
Also Improve.
RY GEORGE T. HUGHES.

Special Dispatch to The Star.
NEW YORK, December 29.-The de-
cline In the stock market was checked
today and rallying tendencies appeared,
most emphatic in the industrials and
utilities, but to be seen also in the rails.
The only logical explanation for the
rallv was the intimation from Wash
ington that repeal of the so-called capi-
tai gains and losses provision of the
income tax law was favored by the
dominant party in the lower house OF
Congress. 1t suggested that such re-
neal if carried into effect, might af-
feet the sales to take losses on 1881
income. AS a matter of fact, any such
probable, but the report did have an
influence on the stock market.
Short Covering.
Besides drying up the supply that
had been coming from large holders Of
securities, the story stimulated a cer-
tain amount of short covering, and that
help prices. To take a few examples:
United States Steel by noon was selling
2 points above the low of Monday,
American Telephone showed similar
gain. American Can touched 60 against
the low of around SO, Allied Chemical
was in active demand and the volatile
Auburn Auto ran up from to 6 points.
There was no change in the outside
news to stimulate the market besides
the tax proposition. There was still the
urge on the part of institutions to show
liquid position at the first of the year.
Railway earnings we're as diScourag1ng
as ever. The Street could not see that
any progress had been made in clearing
up the foreign situation. Money was
trif1e firmer, as was natural at the year.
end. Nevertheless, the market viewed
events today with more hope than 1t
had shown in a week. 1t was of some
significance that volume increased today
on the recovery.
Among the stocks to show a better
tone, besides those already mentlonea.
were International Business Machines,
Coca Cola and Eastman Kodak in the
higher priced group, and General Mo-
tors, Standard Oil of New Jersey and
North American in the others. Tobacco
stocks did better today, especially Amer
lean Tobacco B, in which there seemed
to be large short interest.
The rails were more irregular. Della
ware & Hudson fluctuated through a
wide range. AtchiSon and Union Pacific
we're the strongest of the dividend pay
ers In the first hour Western Union
made a new low for the bear market,
but recovered partially afterward.
Directors of Allied Chemical declared
the regular quarterly disbursement OF
81 so a share on the common stock Of
that company. This had been generally
expected.
Gains at Opening.
Fractional gains outnumbered de-
clines at the opening.
United States Steel opened at 367s,
unchanged. General Motors likewise
was unchanged at % and so was
Standard Oil of New Jersey at 2612.
Overnight developments included a
firmer tone to the London market, a
decrease in weekly crude oil output, a
further decline in automobile produc-
ton during November and a slight de-
cline in sterling here to S343 along
with some increase In gold holdings
here
American Can, whose directors meet
for dividend action today, opened at
59A, off g. as the Street expressed
some doubt about the payment of the
usual extra Christmas dividend. Allied
Chemical at 65ls was unchanged It's
directors also act on dividend pay
ments today. General Electric at 24Is
rose fractionally, but Westinghouse
Electric lost a shade at 227s.
Fractional gains were recorded by
Canadian Pacific at l1l2, Chesapeake
& Ohio at 26, New York Central at
28a4, Pennsylvania at 10 and Southern
Railway at 77s, but New Haven de-
clined l point to 1884 and Northern
Pacific was off q at Is
Consolidated Gas advanced u to
5834 and international Telephone was
up 4 at 77s, but North American was
off y at 303s and Western Union was
down 70 at 40ls. Auburn Auto dropped
81 to 12334. American Tobacco COM
mon was up Il at 65i4 and the B
shares were slightly higher at ST.