Evening star., 1949-07-31
Stock Rise Halted,
Fourth-Round WAGE
Increase Expected
By William D. Horeon
Associated Press Financial Writer

NEW YORK, July 30.-The stock
markets summer advance broke
down this week in muggy mix
ture of hot wet weather and
speculative timidity.
At the week end Wall Street
VS. none too sure whether the
breakdown was temporary prob
lem which could be repaired by
more aggressive demand for stocks
Or whether the summer advance
had come to the end of the road.
Prices moved during the week
against a background of scores of
corporate earnings reports which
were better-far better, in many
cases-than had been expected.
Helping to create a favorable at
mosphere, too, were a scheduled
rise in steel production schedules
and the Presidents request for
additional sums to rearm Western
Europe.
Reached Peak Tuesday.
The market moved up briskly on
Monday and on Tuesday reached
TIE peak of it's rally and high
since May 10. Since mid-June.
Immediately after dropping to a
4ia-year low. the market had been
steadily climbing.
On Wednesday. though, the diet
of earnings on which the market
had been fattening apparently got
a little too rich.
The market was taken with an
attack of speculative indigestion.
Trading was comparatively lively
but prices seesawed. That was
the first day the market had
chance to appraise United States
Steel corporations quarterly and
siX-month report.
United States Steel announced
that net income for the first half
was the largest for any similar
six-month period in twenty years.
Shipments during the period were
the largest on record.
The impact of this information
on Steel's common stock was a
little less than spectacular. The
stock closed 1912 cents lower at
$2225 share.
On Thursday another industrial
giant, General Motors. announced
its first half results. The COM
pany earned more, produced more,
and sold more than at any other
time in its history. The stock
closed 1912 cents lower at $6l.8712
a share.
The Nations No. 2 steel pro-
ducer. Bethlehem Steel, reported
on Thursday, after the close of
the market. that its earnings dur
ing the first half were the largest
for any six months in its his
tory. On Friday the market
weighed this bit of news and the
stock closed 1212 cents lower at
$27.6212 a share.
Future More Important.
The market, of course, is tradi-
tionally more concerned with
what it has earned in the past.
But, at least in the case of Gen
eral Motors, the prospects are ex-
cellent that high earnings will be
maintained for the balance of the
year at least.
Steel executives. on the other
hand, pointed out that new orders
for steel have declined from the
high point of the year and that
the future for the industry was
cloudy. Eugene G. Grace, chair
man of Bethlehem. said he was
mot optimistic" over the imme-
diate future.
One widely held theory for the
markets dead-pan response to
these corporation reports is this:
The income reports of the steel
companies were issued at a singu-
larly inappropriate time. presi-
dental fact-flnding board is
weighing the pros and cons of the
argument between the steel indus
try and the steel union over the
question of more pay and social
benefits.
The position of the union, it
was felt, was vastly. strengthened
by the mere admission of these
record profit figures.
Pay Increase Expected.
Wall Street, in fact, figured that
q fourth-round wage increase
even though the increase might be
small-Was in the bag.
Carrying out this theory, the
market seemed to be saying that
another series of wage increases
and social gains will inevitably