Evening star., 1934-06-03
Exchange Topics
BY the Associated Press

BY the Associated Press.
NEW YORK, June 2.-Additional
~ scattered liquidation in stock
in early trading today found
the market meeting better support
around the May low levels. Traders,
in consequence, moved to cover short
commitments and little more buying
came in from the outside as result of
favorable Interpretation given to the
resistance the market developed at
current levels. Wall Street attached
secondary importance to the move
mentS of grain prices as a cue to the
direction of stock prices.
Although the average price of 90
stocks established a new 1884 low
yesterday. the market generally did
not break through the lows Of the
recent Spring decline The previous
average low was made on May 12
However, the following session, on
Monday, May IA, stocks rallied brisk
ly after a sharp early break on which
lows Of the movement really were
made. Hence not much significance
was given to the breaking of the May
II lows on basis of closing averages.
The market now has made a double
bottom on the charts. Having tested
out the May lows, stocks should level
out here to convince bulls who read
charts for market guidance that the
next intermediate swing should be up.
Stock prices on the average now are
below the level of the market a year
ago. For last year the Spring bull
movement gathered fresh strength
toward the end of May and pursued
its rise strongly into June and July.
However, industrial shares. as meas
ured by the Standard Statistics In
dex, are still $50 per cent above the
lows of the bear market touched two
years ago and within Is per cent of
/ the peak made last July and dupli-
Gated early in February. Hence bulls
are not ready to concede the mai jor
cyclical movement upward has termi-
mated, despite current lack of inter-
est in stocks and uncertainty in Wall
Street.
Heavier coal and ore loadings have
been chief contributors to increased
freight movement on the railroads the
last three weeks. Total carloadingS
last week, at 624567 were figured as
1851 per cent OF normal. the highest
on that basis they have been this
year, although the latest total was q
little under the 1884 peak touched in
March. Sharp expansion in ere load
lngs lately reflect sustained steel
operations around the Spring peak.
Demand for hard coal in anticipation
OF price increases is held partly re-
sponslble for the larger movement of
coal, with anthracite production
running nearly twice that a year ago.
While carloadings, electric power,
steel production and other major in
dustrial barometerS hold a substantial
gain over 1888. narrowing of the
spread is anticipated over the next
few weeks. Through June last year
| business lndices rose sharply toward
the peak attained in July. Freight.
steel, power and automobile indices
all made belated seasonal peaks in
June or later as production schedules
were stepped up in tune with the rise
in commodity and security prices and
in anticipation of increased costs
under N. r. A codes.
Seasonal decline in activity this
year gives business men more cause
for worry than in former years. For
under N. r. A. codes, costs are not
as flexible as they used to be. Slack
ening of demand usually brings price
reductions to move goods. Hence Wall
Street figures profit margins will not
be as lucrative this Summer as they
have been the last few months. Tex
tile men, particularly, find the situa-
ton difficult. Besides N. r. A. code
provisions governing wages and hours,
they have the added cost of pro-
cessing taxes and firmer tendency
in raw material prices. These limit
their ability to cut prices as a means
OF stimulating demand.