Evening star. [volume] (Washington, D.C.) 1854-1972, 1957-10-25
Giddy Girl

Far be It from us to try to explain
the downs and ups OF the stock market.
We doubt that anybody really knows
Just why Its recent nosedive has been
followed by Its most sensational come
back since November, 1929. Indeed.
even the most expert of Wall Streeters
fight shy OF attempting to elucidate the
situation In anything but the most un-
calculating way. They say. for instance,
that President Eisenhower's optimistic
remarks may have had something to do
with the spectacular upturn. And they
say. also, that we ought not to overlook
certain technical reasons" that are
much too complicated--and dry as dust
for us to set forth in this brief
commentary.
All We can say, as matter OF fact,
is that the situation Is confusing. This
seems the more true because the stock
market. II it were really an accurate
barometer Of our country's basic indus
trial and agricultural conditions, ought
to have remained quite stable during the
last few days Of its conniption fits. Why
shouldn't 1t have? Why shouldn't It
have kept in mind the essential facts
OF the latest report Of the Presidents
Council Of Economic Advisers? For
what the report shows Is that our Amer
lean production Of goods and services
rose to record rate Of $439 billion an
nually during the third quarter of the
current year, or about $40 billion above
the yearly rate in the comparable period
OF 1856. In other words, despite some
disturbing soft spots here and there,
our national economy still appears to be
much too strong to have warranted,
even for a short spell, glum, bearish
mood in Wall Street.
Involved in all this, Of course. are
many complicated and unpredictable
factors. They include the shrewd pro-
fessional traders who are always on the
alert to capitalize on a situation in
which national moods and emotions tend
to affect stock prices. They include,
too. the solid and knowing institutional
investors who in this instance have
shown undiminished confidence In the
general status Of our economy. And
they include, finally, those millions Of
Americans who buy and sell securities
In small quantities, and whose decisions
to do either one or the other are gov
erned. as often as not, by the way their
hopes and fears rise or fall with what
seems to be good or bad developments in
the news Of the world. When the head
lines tell about Sputnik or the KremIin's
sinister belligerency in the Middle East,
their spirits 60 down. Similarly, when
the President speaks confidently, or
when we make one Of our own missiles
do some rather impressive tricks, they
feel a lot better, and their signifi-
cant role in the market is affected
accordingly
All Of which brings US back again to
the question whether the fiuctuation Of
stock prices Is actually sound or reli-
able economic barometer. The answer
would seem to be no. In fact, as Wall
Streeters themselves have acknowledged,
the market sometimes seems to behave
in the unreasoning manner Of manic
Oppressive, filled on one day with wild
sense Of soaring euphoria, and on the
next with q sort of compulsion to feel
terribly depressed. Or If that Is too
extreme thing to say Of it, then It may
be likened, at least on occasion, to a
giddy girl whose swift-changing whims
and fancies are too mysterious to be
either anticipated or explained. In these
circumstances, it can hardly be viewed
as a good index Of the state Of the
Nation, and only the reckless would dare
to be cocksure about what 1t is likely to
do from day to day.