Evening star., 1934-01-28
SECURITIES REFLECT
IMPROVED OUTLOOK
FOR j. s. BUSINESS
Enormous Expansion Pre-.
dicted as Result of Gov.
ernment Spending.
EUROPEANS TAKE LEAD
IN RECOGNIZING SITUATION
American Funds Appear to Be on
Way Back From Abroad-For.
eign Buying Increases.
BY CHARLES w. STORM,


NEW YORK, January 27-The i'm
provement in the American economic
situation was reflected during the past
week in the increased activity and
strength in the stock market. OF
course, some of the activity was the
result of manipulation. but there was
a real and genuine demand for Amer
lean stocks from Americans a. we'll
as from Europeans.
In fact. the Europeans seem to have
taken the lead in recognizing the vast
expansion in industrial activity that
must Of necessity result from the tre-
mendous amount Of money to be ex-
pended by the United States Govern
ment under the industrial recovery
program.
Members OF international banking
firms here say that most European
financiers look for wartime activity In
American industry, and because Of the
publication of the Presidents monetary
plans. they have renewed faith in the
American dollar. They consider Amer
lean stocks relatively cheap at cur
rent levels and have been substantial
buyers This has had something to do
with the downward trend Of sterling
exchange during the week.
American Funds Return.
The large volume Of American money
that took flight several months ago
when there was much uncertainty as to
the level at which the dollar would be
stabilized appears to be coming back
and finding its way into the stocks
Of seasoned companies.
The influx Of buying has also been
accelerated by the continued optimistic
reports Of business. particularly with
regard to the motor companies and al
lied trades. Retail trade has shown
remarkable expansion so far this month
and January, according to some officials
of chain merchandising companies,
is expected to establish a new peak.
One outfit reports that its sales have
increased upward of so per cent during
the first 20 days of this month. Ma
terial expansion in the heavy industries
is expected Just as soon as orders can
be released by the elimination of "red
tape"
One influence that has perhaps con-
tributed to the improvement in senti-
mert has been the fact that most OF
the important banking interests have
stopped criticizing the administration
and seem disposed to play along with
the Government in the campaign to
bring about recovery. The banking
interests undoubtedly realize that there
is little to be gained. at least financially,
by opposing the administrations plans.
The banking interests also recognize
the improvement which has actually
taken place in general industry and
realize that there is likely to be plenty
of employment for their vast idle re-
serves of money and credit.
An idea of the innDrQyenSnt that has
occurred in sentiment in the financial
district may be cleaned from the fact
that there was a total absence of ap-
prehension in connection with the Of
fering of a billion dollars worth of Sc
curities by the Government. The sue
cessful sale Of these securities did not
even cause a ripple Of excitement. not
withstanding the hugeness of the op-
Grafton.
Cats" and Dogs" Active.
The only unpleasant aspect of the
stock market during the week was the
prominence in the trading by the So
called "cats" and dogs" meaning
stocks which sell for a small number
of dollars and possess little or no merit.
Usually when this type of stock be-
comes active the owners of seasoned
securities begin to look for a temporary
setback in market prices.
The most important traders in the
financial district believe that the United
States has embarked upon period Of
industrial expansion and that the out
business warrants expectations of high
er securities prices.
(Copyright, 1884 by North American News
Alliance.