Evening star. [volume] (Washington, D.C.) 1854-1972, 1951-07-08
Armistice Prospects
Stock EXCHANGE
To Week Of Recovery
By Roder Wineet
Associated Press Financial Writer

dTIIIlSIlCG OIl LIlclI ul1lQo b1l1S WCCh,
and the more they thought about
it the more they liked it. The
market went up.
The whole week was in the ma
ture of a second guess from the
previous week when the Russian
proposal for a ceaSe-f1re startled
Wall Street with its unexpected
ness. The market dropped.
AS measured by the Associated
Press average of so stocks, the
market in the last week, which
was interrupted by Independence
Day, regained around IS per cent
of the sharp fall of the previous
week.
Much of Loss Regained.
The market started this week at
the lowest point of the year, $88. 90
in the APP average, and when the
week closed it stood at $1,000, up
$3.50. That's the second biggest
weekly gain of 1851. 1t certainly
went a long way towards retriev-
ing the $3.40 loss of the previous
week.
Naturally you are not going to
find any pat answer explaining
why the stock market reversed it
self from one week to the next
and headed up instead of down.
But there are some fundamental
pressures behind the market move
ment that can be outlined.
A week ago a lot of people
were scared when they thought
what would happen to business
in America if the fighting stopped
in Korea. Actually they didn't
know. A considerable amount of
frightened selling stemmed from
the uncertainty.
Bearishness Re-examined.
When a new low for the year
was established a week ago Fri
day, that meant to many people
that a new bearish signal had
been given.
Obviously not every one be-
lieved that. The market went up.
"A technical rebound" it was said.
In any event Mondays advance
was very good, and the railroads,
which suffered severely the previ-
Gus week, did fairly well in the
rising market.
Tuesday the market did even
better. and by the time it closed
for independence Day there were
many VINO reassessed their bear
ishness.
Thursday found the stock mar
ket in the midst of a concentra-
ton of bullish developments. On
purely technical basis the mar
ket then could go still higher
without encountering serious SELL
ling.
/ Capital Warnings Heard.
In Washington there was one
warning after another that heavy
Imitation was just around the cor
ner unless stiff controls and
higher taxes were pushed through
Congress.
1 In the past the market has al
ways gone up when imitation talk
lis rampant. And besides Congress
showed little inclination to rush
Through the administrations con-
troll plans. Tax legislation still
left lots to be desired from the
standpoint of the administration.
but the business community didn't
show the same dismay.
i AS the day progressed, short
> covering put in an appearance
| and added its pressure on the up
!; side.
The Canadian government
granted an interim freight rate
increase to Canadian railroads. A
preference for American carriers
, Immediately put in an appearance
on the theory that the action was
straw in wind which might
blow a parallel increase in freight
rates for American railroads.
Best Day of the Year.
i When the day ended it turned
out to be the best Of the year,
up $1,70 in the AP average, an
amount equalled but not exceeded
since December 8, 1916.
Some thought the summer rally
had started. It's traditional al
i about this time of year.
! But there was a shaking OF
: heads in Wall Street, too. Many
=: sound analysts contended that the
, weeks advance still was within
the bounds of a technical rally
that could extend only to certain
limits.
Just to cite one restraining fac
! tor, they pointed to the compare
. lively low volume of trading on the
rise. In every case daily volume
a was below the daily average fol-
: the year.
" On the last trading day of the
I week yesterday. volume simmerec
E down to the lowest point of thu
e week, and the market sagged {
: little with the Associated Pres!
r average off 10 cents. All bullisf
enthusiasm was not gone, but the
pressure behind the rise peteret
0 out. ..r.
. Old Slogan Recalled.
7 Brokers, however, cited one
s strong prop under the advance by
recalling an old Wall Stree
slogan-"Peace is always bullish.
- And bulls kept their finger
T. crossed while United Nations rep
resentatives prepared to meet will
IIKorean and Chinese Reds on tn
battlefield for the first time il
negotiations aimed at peace.
II The five most active stocks o
the week were Fedders-Puigan, vi
| 20 at 1874 with 171,500 share
traded: Radio Corp, up IA a
I21A; National Power g. Light, OF
70 at /; Standard Oil (New Jer
sey), up ia at 81, and Genera
Motors, up 212 to 1879.
G. C. Murphy Co. sales in Jun
V. - o ono cen VIC 60 nA1 400