Evening star., 1946-09-08
Stock Market Break
Remains Mystery
In Wall Street
By Victor Eubonk
Assoeioied Pres, financial Writer

NEW YORK, Sept. THE stook
market during the past week suf-
- fered its sharpest slump since the
secondary crash of 1880, on the
largest single days volume in six
years, and Wall Streeters continued
to ask themselves "Why?" without
getting definite answer.
In an effort to give the customers
something in the way of an expla-
nation, one commission house ana
lyst said:
The bad break might have re-
fiected the following circumstances:
Il. Belief that postwar spending
and restocking frenzy is nearly over,
that many consumer goods indus
tries have passed the peak of sales
and profits and that national in
come therefore may not maintain
the present high level
2. Apprehension regarding an in
ternational rupture in the near fu-
ture engendered by some irresponsi-
BILE statements in press, radio and
magazines.
g. Growing fear that domestic
and foreign political turmoil may
prevent such basic underlying fac
tors as home building, automobile
manufacture. huge agricultural out
put and exports from taking hold
In time to forestall business de-
cline such as followed the last post
victory boom and resulted in the
1921 depression.
4. The congestion OF new secu-
rites offerings resulting in de-
creased public buying power in list
ed stocks.
IS. Renewed strikes and threats
OF strikes, and exceptional thinness
OF the market caused by the elimi-
nation of margin trading which has
been restricting bids on recessionary
moves"
Foreign Selling Denied.
There was some talk of heavy
foreign liquidation but houses with
European connections and Treasury
Secretary Snyder denied this. Re-
ports that taxes would not be re-
duced and might even be boosted
to provide for a new armament
program also were cited. In addi-
ton, there was the fact that man
ufacturers' inventories had climbed
TO record high, business loans of
banks continued to touch weekly
peaks and that the technical situ-
alton in the market itself was shaky.
Heavy selling hit the stock divi-
Labor Day recess, and wide-scaIe
losses were registered in all depart
ments. Such blue chips" as Du Pont
dropped II points, Union Pacific
lo1<, Allied Chemical 10, Santa Fe
sA, Chrysler 77s and United Steel
8. The averages hit a new low since !
August "a. 1s45, on the biggest turn
over since January with the ticker
tape frequently late. The days aver
age fall was the most substantial
since June 16, 1880.
Liquidation was fast and furious
at the start of Wednesdays session
as brokerage customers and stock
exchange professionals dumped
holdings. The ticker Jagged during
most of the forenoon and in the
nnal half hour when a recovery
shift got under way and initial de-
cllnes running to II or more points
were reduced in the majority of
cases. Activity picked up to 1920 900
shares, top since May 81, 1910. The
market was the broadest on record
i .08S issues appearing. While a new
overall low was reached, the setback :
was much less than on Tuesday The
two-day dollar loss, based on quoted
values, was placed in the neighbor- G
hood OF $4,000, 1000 900.
Maritime Strike Bearish.
Short covering and reinstatement
OF commitments on the idea that
the list had been drastically oversold
brought broad rally Thursday with
the average comeback the best since :