Self-Restraint

> New York Central, rosy with the rush of shipping business that has brought the flush of health to many a wan railroad cheek, last week announced a September net of $3,120,096, reported that fat business had cut its 1939 deficit to 90-c- a common share, compared with $3.32 for the first nine months of 1938. That day New York Central, a fast mover in a normally lively market, stood at 20 1/4. Next day it was down to 20, the following day to 19 3/4. Last week it closed at 20.

>Recently U. S. Steel turned up in the black (by 47-c- a share) for the first time since 1937. By last week's end Steel common had fallen almost five points, stood at 70 1/4 compared to its September high of 82 1/4.

> When Bethlehem Steel, No. 1 U. S. war baby, reported nine-months earnings of $1.89 a share, as against a $1.26 deficit last year, its stock fell two points. Last week it sold at 85, down 15 points from its war-boom high.

> North American Aviation announced record earnings of $1.47 a share, up $1.17 from 1938; a little later it got a $20,000,000 British order that virtually doubled its backlog. But North American shares marked time between 26 1/4--27 3/4.

The ancient saying, sell when the good news is out, might account for these typical examples of recent stockmarket behavior. But certainly the stockmarket which bounded ahead enthusiastically when war commenced, last week showed a phenomenal indifference, if not distaste, for good news.

Steel production stood at 95%; cotton, wheat and other agricultural products showed strength; the automobile business was booming, except for strike-bound Chrysler; third-quarter reports of U. S. business were sensational; many a dividend check--regular, and extra--was going into the mailman's bag.

Yet at last week's end sales since Jan. 1 on the New York Stock Exchange averaged only 896,517 shares a day compared to 983,577 shares in dull 1938. And the Dow-Jones average of 30 industrials, which stood at 155.92 when the third-quarter earnings reports began to hit the financial pages, hovered around 151--about the non-boom level of 1938.

All these things showed a remarkable restraint on the part of U. S. speculators (save for the "little fellows" whose odd lot purchases have exceeded their sales for the past month). U. S. business still waited to see whether consumption would catch up with increased production, whether real war orders would come to keep U. S. factories busy before another inventory recession slowed them down.

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