Evening star., 1949-07-03
Stock Market Extends
Advance, but Public
Stays on Side|ines
BY the Associated Press

BY the Associated Press
NEW YORK, July 2-The stock
market stayed on the recovery
trail this week although the going
was rocky at times.
For the second week running,
the market on average ended
higher. This weeks gain. though,
was considerably less than the
preceding week.
The advance was notably lack
ing in enthusiasm. On two days
the volume of business dropped
below 100000 shares each and
total transactions for the week
were the smallest since last Au-
gust.
The satisfaction that a rising
price curve gave to bullish minded
Wall Streeters was badly marred
by the failure of the market to
attract general public support. A
summer advance is possible. in
the opinion of some market ana
lysts, but it will not get very far
unless wider investor support can
be whipped up.
Probably the best Interpretation
of the markets action is this: A
very limited number of investors
have enough confidence that busi-
ness will not fall fat on its face
this year or next and that, conse-
quently, many stocks are favorably
priced in terms of yield prospects
and price appreciation.
Even this minor buying interest
was enough to lift prices to the
highest average level in just about
a month. Measured by the Asso-
ciated Press average of go stocks,
the market has recaptured little
more than one-third of the losses
taken in the mid-May to mid
June break.
Whether or not the advance will
be sustained. or whether the mar
ket will fall back and break
through the 412-year low hit on
June 13, remains to be seen. Wall
Street opinion on the question is
sharply divided.
Prices Off Sharply Tuesday.
The week got off to poor start.
with the market on Tuesday TAX
ing the worst spill in two weeks.
The drop. according to one theory,
was caused in part by long de-
cline in the London Stock Ex-
change. Late in the day, demand
picked up. which was attributed
to the complete failure of the Ad-
ministration's plans to get the
Taft-Hartley Law off the books.
For the next three days the
course of the market was upward
although it was frequently a
strained and laborious advance.
Prices advanced against the
background of a steady flow of
unfavorable news reports from the
business world.
The Federal Reserve Board fla
vored the news on Tuesday with
a report that its production index
in May had dropped again Ito 174
per cent of the 19935-39 average
from 1872 a year earlier) and a
comment that "the index may
show a similar decrease in June.
On Friday the Census Bureau
announced that June unemploy-
ment reached a seven-year high,
largely because of teen-agers COM
ing into the labor market. Total
employment at the same time was
tops for the year.
In between, for the financial
community to ponder. were such
dreary items as a Government
antitrust suit against du Pont,
General Motors, United States
Rubber and others; another de-
cline in business loans; series
of price reductions at retail and
wholesale levels; lower depart
ment store sales; a batch of divi-
dend reductions; and continued
drop in steel production.
Business news was not entirely
gloomy. Demand for nonferrous
metals continued to improve after
a severe let-doWn earlier this
year and some plants were able
to call back either new workers
or workers previously furloughed.
On balance. however. day-to-
day reports made it clear that
the economy, creaking and strain
ing, was still trying to achieve
some sort OF equilibrium.
Another noteworthy angle of
the markets performance was the
response to labor news. The an
nual slugging matches between
labor and management for new
contracts are we'll under way now
and it is already apparent that
the two groups are miles apart