Evening star., 1932-12-10
GUIDE OPERATIONS
BY MARKET TREND
"In-an.0ut" Traders Ignort
Financial and Trade
Fundamentals.
Special Dispatch to The star.

special Dispatch to The Star.
NEW YORK, December 1O.-Curreni
movements in stocks give point to ths
premise that the average in-and-oul
trader is not concerned with the finda.
mentals Of business or Of finance. Hs
is interested solely in the trend Of the
market. II the activity Is on the side
Of advance, that is enough for him. He
buys stocks. II the volume is on the
side OF decline, he sells, content to "a
with the crowd while knowing that hs
takes the risk of a sudden reversal
which too much company always ins
wolves.
1t is therefore significant to the pro-
fessional mind that in the last two OF
three sessions all the volume has been
recorded when prices were advancing
1t has resulted in the adoption of ap
optimistic attitude which is not easy ID
explain on statistical grounds.
Another theory widely held in ths
Street, particularly during this beaI
market, Is that the railroad stocks
signal the change of trend. Current
strength In the carrier issues, regardless
Of the reasons back Of it. has convert@
ed many doubters to the constructive
side. AS a natter-of fact, the railroad
outlook is somewhat better. More roads
are able to offset decreases In gross
With increases in net. The only quesa
ton, in the case of the weaker roads
Is whether they will be able to carry ths
additional charges on Reconstruction
Finance Corporation loans long enough
to come out even on earnings. Mean.
while it is believed that nearby ma,
TURTLES for the important roads win ba
taken care Of.
L. & N. Strength Cited.
N0ar1u Ill tha ratIroal rka~I-- hn~-s
given a good account Of themselves Of
late, but particular attention has been
attracted to Louisville & Nashville
That stock was UP several points tFIi1
week on O turnover unusually large,
Louisville & Nashville is controlled
by Atlantic Coast Line through owners
ship of over one-half the capital stock
Directors omitted the semi-annuai
dividend, ordinarily payable in August
at their May meeting and, while earns
ings for October showed q net Of sIs
5,818, against $952,749 in October,
1881, the latest estimate was that od
an annual basis the road was not cow
ering hxed charges. 1t may be, OF
course, that Atlantic Coast Line is &C,
quiring additional stock or it may bs
that some other road is accumulatina
an interest in the Louisville e. Nash
vile, but It can hardly be that in-
vestors are buying it in anticipation OF
resumption Of dividends.
The cut in the dividends on the pre-,
ferred stocks Of American Power q
Light had been discounted marketwise
and both advanced after the news was
out. Holders of the low-priced utilities
however, have had rather discouragina
experiences Of late. There has been
too much talk about dividend reduce
~ - AA -
any good.
United Corporation is probably the
one with the largest following, and n
this case no question about the divi-
dend has been raised. The present
rate Is 40 cents annually, IN effect since
April. United Corporation has large
investments in United Gas Improve.
rnent, Niagara Hudson, Columbia Gas
Public Service of New Jersey and COM
monwealth & Southern. It has, more
over, the strongest of banking spon-
sorship. The stock has been notice.
ably steady for some time.
Loan Ratio Higher.
The stock loan ratio Is slightly high.
er. Total borrowings by stock Exchange
members against collateral on Decem-
Der l were 1.52 per cent Of the market
value of all shares listed, against i.39
per cent on November i. A much
larger increase would still leave the
ratio Of borrowing extremely low.
Within reason, rising loan total would
be bullish and not bearish.
The attitude Of the Street toward this
session of Congress Is much moro
friendly than it was q year ago. Con-
structive legislation Is expected on farm
relief. real attempt to balance the
budget Is anticipated and the belief
persists that some compromise will be
effected on the war-debt payments due
December Is, which viii remove that
menace to the stability of sterling ex-
change, on which commodity prices so
largely depend. The Street hopes that
Washington will not betray this new
found trust.
Stock market operators keep a close
watch on the course of bank shares,
trading in which goes on for an hour
OF more after business on the exchange
has closed. If bank stocks are strong
In the late trading. they take It as q
good omen for the opening the next
day.
tCopyrisht. 1880