The Washington times., 1934-10-29

N it was, however,
the increased
'''''''''''-'''''' '''"s''' A& &C tivity was
Lewis Haney largely on the
crack in prices on Thursday,
which brought fairly heavy trad
ing for a half hour or so.
The history of the market week
Is told in: Cd The clear evidence
on Monday and Tuesday that all
upward momentum had been lost,
CO the unwiSe and ill-fated at
tempt to run stock up Wednesday
on the railway pension decision,
and 90 the sharp crack on
Thursday as the inSignificance of
that decision was realized, and
disappointment in the President 5
speech developed.
Considering the situation as a
whole, I think the market held
remarkably well, and that the
technical position must be fairly
strong to have allowed so good a
showing. The news was mostly
bad, and the sharp reversal on
Thursday was very trying to sen
timent.
It is only natural that the
gap of October IL should have
been covered, as it was on Fri
day. 1t will not be surprising
to see the gap of October 5 also
closed up, which gap is only
about a point lower, but barring
unforeseen news, / would not
expect much to be doing either
way until after the coming elec-
tiOnS.
It is fair to say that the back
of the rather artificial September
October rally has been broken,
and the gaps which character
lied it are being filled up; but
that does not mean any pro-
1onged decline.
AS I pointed out last week, the
market was likely to react if the
President did not give the bank
ers definite and positive assur
ances of sound policies. This he
did not do. He said little, and
what he did say suggested fur
ther Government control over
banking policies. Since financial
circles had tried to be bullish
over talk Of reconciliation" and
cooperation" the result was
beariSh.
That mark.up in the rail
stocks was extraordinary ILL
judged. Whether a few mil
lions are saved in pensions or
not, the cold fact is that what
the railways need is traffic.
September gross revenues were
about % per cent lower than
last year, and the net was over
30 per cent lower.
So it is with third-quarter in
dustrial earnings. The earlier
statements are usually the most
favorable. Last week, as the big
ger companies began to report, 1t
became clear that earnings were
Just about as poor as had been
anticipated.
Again, I think the market did
we'll considering the jolt given
ill-founded optimistic sentiment by
the news about Bethlehem Steel,
Consolidated Gas, Baldwin Loco
motive, General Motors, etc.
Then there was the continued
trouble in oil, the labor demand
for a 30-hour week in motors
the bonus agitation, and disturb
ing foreign conditions, including
weakness in gold block" curren
cieS.
Just at a time when the infla-
ton steam has been turned of
temporarily, and attention CEN
tered on business conditions, busi
ness has not been such as tc
stimulate the market, and un-
certainty is as great as ever.
But there was no general heavy
pressure on Friday. Important
holdings of initiation stocks are
still held. The leaders held well
on Friday and came back little
on Saturday.
So, while a little further set
back may reasonably be ex-
Fected, 1 would guess that the
worst of the reaction has been
seen, and that those stocks
which are backed both by fair
earnings and by initiation posi-
bilities will soon hold. Such
stocks are the only ones you
and / should own.