New Market Peak

After rising almost steadily for four weeks, the stock market last week broke through the postwar bull-market high. The Dow-Jones industrials average hit 294.03 highest point since April 17, 1930. Railroad stocks, along with oils, were among the leaders. Even motors, long the ugly ducklings of the list, were beginning to show a few swanlike pin feathers.

There was reason for such optimism. The slump in used-car demand, which had pulled down new-car sales, had reversed itself. And new-car sales, after a slow start early last month, were also picking up. Ford Motor Co. reported that its January sales of 140,633 cars and trucks were highest in history for the month, up 16% from a year ago.

Overall, the Federal Reserve Board announced that industrial production had a "slight further decline" in January, after dipping in December to a level about 7% under last summer's record peak. Truckmakers were scheduling a cut of 10% to 15% in first-quarter production, and Chevrolet was trimming back its output slightly. Nash announced price cuts in its cars ranging from $20 to $210, the larger cuts resulting mostly from eliminating radios, heaters, etc. But in Atlanta, where 750 of the 1,370 employees at a Chevrolet plant were put on a four-day week, Cadillac buyers were told they would have to wait two months for the most expensive models, longer for lower-priced Cadillacs. Another optimistic note: Construction in January hit $2.4 billion--up 3% from a year ago. And a Dun & Bradstreet survey of 1,315 top executives showed that 46% expected second-quarter business to be better than a year ago, 32% expected no change. Only 22% looked for a drop.

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