Cut in Margins

The Federal Reserve Board, which long ago relaxed or dropped special requirements for down payments on houses, appliances and other consumer goods, last week did the same for the stock market. It cut the margin (i.e., cash payment) required of stock-market investors from 75% to 50%--back to where it was before Korea.

The high margin was not needed, since most stock buying has been for cash. Outstanding credit on stocks last week was only a mere 1.8% of the total value of listed stocks. By making it easier to buy, FRB hoped to steady the market, which has gone down more often than up in the last two weeks, and encourage nervous businessmen who still think that the market is an accurate barometer of business conditions. Last week Government bonds were also weak. Long-term (20year) issues sold below 95 for the first time since issuance, bringing their yield up to 2.8%. Reason for the drop: investors think that the Treasury, in its effort to lengthen debt maturities (TIME, Feb. 9), will boost rates on new long-term issues to 3% and more.

But in the commodity markets, where falling prices have worried the Administration, there was some cheer last week. Wholesale pork prices went up and beef prices steadied. As dust storms whipped the winter-wheat areas of the Southwest, wheat prices scooted up 4 1/2 to 6 1/2-c- a bushel; corn, helped by news that the Government would step up purchases, also moved higher. The rally in grain prices was the best in two months.

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