Hair Trigger

Since the start of the Korean war, the stock market has become trigger-sensitive to news from Washington. Last week the market was so ticklish that it reacted to news before traders knew what the news was. In the two days following the Fourth of July holiday, the Dow-Jones industrial average had chalked up a tidy rise of 2.5 points to 210.85. But shortly after 1 o'clock on Friday afternoon, the news tickers in brokerage offices flashed a cryptic message from Washington: the President would make an important announcement at 3 o'clock (i.e., after the market had closed).

Because of the timing, traders assumed that the news would be bad for the market (it turned out to be the President's authorization of the draft). Without waiting to find out what it was, they nervously started to dump their newly purchased stocks. Prices dropped. Hardest hit by the new selling wave were the stocks of television companies; they tumbled as much as 4 1/2 points. In two jittery hours, the blue-chip Dow-Jones industrial index also dropped 2.39 points to 208.59, wiping out all but a small fraction of its earlier gain. As this week's trading began, television stocks again dropped as much as 4 1/4 points on fears that war might curtail production of TV sets.

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