The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1934-10-08

Celanese and
Standard OF
California lost #.
3s.2 points. --s@. -, - -. ''''A
Bonds gained, Lewis ha"ey
reaching the highest level since
late August, and Governments
rose.
AS anticipated a week ago, a
reaction came as the market had
plainly lost momentum, but it
did not go much over two points.
The Monday break met buying
orders, and the Thursday SELL
off ended in a rally at the
pushup on Friday, with no carry
through on Saturday.
Apparently there has been no
change in the thin, uncertain
character Of the market. 1t takes
relatively little buying or selling
to mark prices up or down.
The Friday rebound seems to
have been caused by the follow
ing factors:
Cd Short covering (and fig
IlreS now show an increase in
the short position during Septem-
ber).
ca Buying of the California
stocks, which had been run down
on fears of a Sinclair victory.
60 Vague hopes of more real
ism and common sense at Wash
ington.
On the whole, most of the rea-
sons alleged for recent market
movements, aside from the weak
ness in the oils and strength in
some stocks, do not seem convinc-
ing. It is hard to believe that
California will fall for Sinclair's
foolishness, and both the drive on
California stocks and the re-
bound, savored of sentimental
hysteria played up by shrewd
traders.
The favorable dividend action
by a few unimportant concerns
has no broad Importance.
The swing-right talk leaves the
little question of Government
spending and initiation unsettled.
The reorganization" of NRA is
apt to mean disorganization in
business, and increased competi-
ton may bring business failures,
which results (while good in the
long rum would hardly help the
market now.
On the bull side, we can still
say that the charts do not show
a formation that looks like a
final peak" The market has
held we'll despite scattered
liquidation, and sinking spells
on Monday and Thursday were
checked at the same definite re-
Sistance evil.
The most active stocks from day
to day have mostly shown some
gains, and a fairly large percent
age of the total trading has &C.
Cured in these stocks.
There is some sense in the
thought that since organized labor
virtually lost the textile strike,
radical labor leaders are less like.
ly to make trouble for while.
On the bear side, we now con-
front the probability Of many
unfavorable third quarter earn
ingS statements, and q smaller
seasonal gain in business than
hoped for. The "heavy indus
tries" are about as depressed as
ever, and the condition of the
oil, copper, lead and zinc indus
tries is bad, with steel not much
better.
The chief hopes of increased &C.
tivity are centered on Government
spending, and on an artificial
drive to get people with $4,000 in.
comes to borrow now" the sum
Of $400 for fixing up their houses.
This will increase our debts with
out increasing our ability to pay
them.
There appears to be a fairly
good chance that the market
averages may gain about two
points more, and If I had to take
a trading position here I would
gamble, on the long side, that a
narrow trading range is in early
prospect-say until the November
electionS-and I can see a posi-.
bility that this last bulge may be
just putting the peak on a pre-
election Fall rally.
It seems well to maintain care
fully selected positions taken as
a hedge against initiation, and to
add thereto from the less Specu-
lative industrial and mercantile
issues which can be bought cheap
1y on an earnings basis. But I
would be very cautious until we
see how the Dow Jones induStrials
act as they approach SO, Ameri-
can Can around 100, Du Pont at
91-91h, Steel at 34-3412, and At
Gibson around 50.
AIYRHYDN CAHEC IT'D