Evening star., 1952-01-02
New Records Established All Along Economic Front During Year
Stocks Close
Year Higher
Despite Dips
By Roder Winget
Asseeiafed Press Finuneial Writer

DSSPlNS Ups
By Roder Wineet
Asseeiaied Press Finuneial Writer
NEW YORK. Jan. 2.-The stock
market had more than an ordi-
nary share Of troubles this year,
but the major trend, of prices
was relentleSly higher.
Time after time the market
was battered down, but each time
it recovered strongly and marched
ahead again.
The greatest shocks to trading
sentiment came from develop
ments In the Korean war.
Many thought it strange that
the market could be sent scuttling
either way by war scares and.
peace scares alike.
A contradiction? No, not when.
you take a close look at the trad
ing psychology behind everyday
market movements.
Started With Boom.
Remember that the market
started the year with a big boom
that carried the Associated Press
average of so stocks to the highest
point in more than 20 years. And
that, we, know now, was only the
beginning. -
Within the first six weeks Of the
year it gained around 8 per cent.
Then the peace rumors started.
Each time the rumors hit Wall
Street, the market backed down.
There were other factors, of
course, but at that time the pros
pect of a sudden peace scared
many traders.
Why? Nobody feared peace it.
self. 1t was the uncertainty sur
rounding the. change from a war
footing to bushes in a peacetine
economy that brought on fright
ened selling in the stock market.
There were just as many shake
outs in the market caused by fear
of war. Why? To Wall Street. a
continuation Of war means higher
taxes and ever tighter Government
controls over civilian business,
elements that choke of profits.
Red Proposal Recalled.
The greatest fall of the year
came on the Russian proposal
for a eease-fire in Korea the
latter part of June. At the bottom
? the market was off about 10 pei
! cent from the previous peak o1
. the year. ~
.. But there was a quick recovery
! when the idea got around thai
business can make more money
in peace than in war. The re.
: covery drive started July 2 anc
rammed ahead strongly until
, October Is when the market hit
. a 21-year peak-a rise of around
Is per cent from the years low
to the years high as measured by
the Associated Press averages.
The usual summer rally had
: carried well into the fall, but
such sustained advance was toe
much for the market to digest
, without a breathing spell. The
breather started in mid October
J a drop of about z per cent in a
, little more than a month.
Rally in November.
It was late in November that
. the market made an early be-
ginning on what is considered
2 the traditional year-end rally. The
) market usually starts an advance
in December that carries through
into January. There was a lot OF
! nesitancy this year, and in tht
. last week of 1851 the market took
a deep second breath and moved
. ahead again. The Associated Press
average of so stocks on the final
day Of the year stood at $98.5t
, compared with $3.50 on the first
trading day of 1851. The market
dropped to a bottom Of $8t
, the last of June and hit a peak
of $101 so in mid October.
There was nothing like un-
bounded joy in Wall Street as tht
market went into the New Year
There were too many disquieting
. potentials.
Fear of a definite turn into de-
f1ation from the current inflated
economy always was in the back
ground.
One of the clouds on the eco
. nomic horizon was harder money
! In March and April the Federal
Reserve Board pulled out of the
) Government bond market, and
Ilong-term issues broke par for
the first time since 1899. The Re-
J serve Board said it would main
tain an orderly Government bond
market but prices were no longer
pegged.
Interest Rates Raised.
i And in two moves late in the
year. New York banks, followed
Immediately by others, raised
their interest rates on loans to
their best customers to 3 per cent
| Continued on Page D-8, Col. L.
1MefnIs Industry