Evening star., 1949-01-02
Record Activity Of 1913 Shows Signs Of eveng off at Years End
.Dog9edbyFeor,
Stocks Ignored
u. S. Prosperity
By WiIIiom D. Horqon
(Assoeioted Press Market Writer.)

(Assoeioted Press Market Writer.)
NEW YORK, Jan. 1.-The stock
market distinguished itself in 194e
by ignoring the Nations most pros
porous year.
1t was year in which fears and
uncertainties tumbled out of the
headlines with scarcely an inter-
1uption. The cold war between
capitalism and communism, peace
scares and war scares, imitation
fourth-round wage increases, tax
prospects-these and other factors
dogged the heels of the market
through the year.
1t was year of several violent
fluctuations and weeks of stagna-
ton.
1t was the latest stretch in one
of the longest sidewise price move
ments in the history CT the modern
stock market.
At the start of 194S the Asso-
ciated Press average of so stocks
stood at $65.70 a share. Today the
market closed with the average at
$64.5O.
The classical theory that cor
poration earnings are in the long
run the determining factor in stock
prices was all but thrown over
board.
Record Profits Cited.
Corporation profits in 194S were
the highest on record, as they had
been in turn, in 1947 and in 1916
The answer to stock price fluctua-
tions-if there is any single answer
lies elsewhere.
The stock market is afraid of its
own shadow. The market see.
danger in every rumor, peril ir
every threat, menace in every
headline.
The market lives in world o.
bogeys and the bogey population il
Wall Street increased at an alarm
ing rate in 1948.
The stability of the market may
be considered impressive if w
measure price trends in terms o.
doubt and uncertainty. A rich busi.
ness record. in other words, pro.
vided solid foundation for a mar.
ket that otherwise would have top
pied under the weight of it's owr
fears.
In February the price level, a!
measured by the AP 60-stock aver.
age, reached the low for the year
A slow, arduous advance got under
way which reached a relatively
dizzy climax in mid-May.
| Helping demand were the domesti,
rearmament and the European ait
programs. both of which were re-
garded as substantial contribution
against the possibility of recession
Rise Started in May.
In mid-May a buying drive hit tn
market with all the power Of a Mis-
souri, mule kick. In the broades
market on record up to that time
nearly 100000 shares of stocl
changed hands, an eight-year high
The reason for a sudden nationa
urge to buy stocks was as simple a
it was curious: The industrial stool
average passed a so-called resist
ance point" and unleashed buyinj
power that astounded Wall Street.
A bull market was on the move
according to enthusiastic report
from downtown Manhattan. Tn
reports turned out to be bum steer
Russian-United States relation
over Berlin went from one crisis t.
another. The bull market manage,
to put on pound or two of weigh
until early July when the high o
the year was established-S72.4O b,
the AP average.
In mid-July the bull move curle,
up its toes and called it a day
Prices dropped like a chunk of lea,
in water. What happened? TIL
Berlin blockade argument ha
reached the stage where people wer
talking of war. The President calle
a special session of Congress. Unite
States Steel Corp, bellwether Q
American industry, announced
wage-price increase. Overnigh
(See HORGAN, Page ED