Evening star., 1932-02-05
REACTION IN STOCK
MARKET RESUMES
Rail Shares Prove Chief Point
of Weakness in Draggy
Trading.
BY GEORGE r. HUGHES.

Special Dispatch to The Star.
NEW YORK, February 5-Under
very moderate amount of selling, the
stock market today experienced a
rather sharp reaction. Railway shares
weakened first, but they were soon
followed in the downward movement by
the industrials.
Several reasons were assigned for the
vincing. Selling Of the rails was said
to be connected with the announcement
that the Pennsylvania Railroad would
apply to the Reconstruction Finance
Corporation for loan in connection
with it's improvement program. That
such a strong carrier as Pennsylvania
should take this action was, at flrst
thought, shock to the Street; but the
Justification is, Of course, the large
amount Of employment that would
result.
Earnings Statements.
In the second place traders made
much of the poor earnings statements
the railroads will make for January.
There is nothing new about that phase
of the outlook It allowed nothing 70
accrue from the benefits of the wage
reduction Another reason Tor the
prevailing beariShneSS was the increase
Of $4,000 900 in circulation shown by
the Federal Reserve weekly statement.
Hardly any talk was heard about the
Far Eastern situation, although the
fact that the downward trend in COM
modities had not been checked was
commented on peSslmistlcally.
During the mornings selling, Atch-
ison and Union Pacific dropped 2 to 5
points. Missouri Pacific preferred, In
which a speculative long interest had
been built up, came down about as
much and such a loW-prlCed stock as
Delaware & Lackawanna dropped a
couple of points. For 1881 Lackawanna
earned 65 cents a share against SO so a
share in 1880.
MANY industrials made new lows on
the movement. American Telephone &
Telegraph was in supply 2 TO points
down, United States Steel broke through
SO early in the day. international
Business Machines sold off 3 to I
points, and Auburn Auto broke 6
points.
All of these declines were brought
about on limited offerings and the
weakness was due, not TO the amount
of stocks for sale, but to the scarcity
Of bids. In so far as the pressure was
the result Of operations Tor the ce-
cline, it strengthened the technical
position There was little evidence Of
any outside liquidation. All that
seemed to be happening was that
traders long Of stocks had become dis
couraged and were disposing Of them
in a market with few buyers.
Opening Prices Lower.
The market started off with minor
fluctuations. most of which had down.
ward tendency. Trading was SLOW.
United States Steel at 40l4 was on
fractionally. Bethlehem Steel at 17i2
was unchanged. Active industrials, such
as J. I. Case, Westinghouse and Sears
Roebuck, were slightly lower while
Bordens, Standard Brands and Wool
worth were firm In the rails there were
small opening declines in Atchlson and
Canadian Pacific.
The utilities also were narrowly lower.
American Telephone was off small
fraction at 1872 Detroit Edison lost a
a point to 113 and Western Union was
off slightly at 361S. General Motors
was unchanged at PA, but Auburn
dropped IL points to 1913. Chrysler and
Packard were both lower. Oh shares
were quiet and unchanged.