Market High

The stock market, which has been going up while business went down, last week hit a new high for 1958. Five days of heavy trading put stocks on the Dow-Jones industrial average up seven points to 469.60, the highest level since September and a good 50 points above the recession low set last October. Spurred on by the good steel news, U.S. Steel, Bethlehem and Republic rose. Lower gasoline stocks and the prospect of stiffer curbs shoved the depressed oils ahead. Even the troubled railroads, which have had precious little to toot about this year, built up some steam. With the possibility of favorable legislation, the Dow-Jones railroad average hit a new 1958 high at 117.45.

Wall Street's experts laid much of the reason for the jump to increased buying pressure from such big investors as mutual funds (which now hold some 4% of all shares on the New York Stock Exchange) and pension funds. Another major reason was that the analysts themselves were changing their gloomy tune and encouraging many a holdout bear to hurry into the market for fear of missing it altogether. In the subtle psychological change, the weight of opinion was against any sharp break back to the recession lows. Instead, Wall Street's shrewd professionals speculated that the market would hang fairly close to the 450-460 level before edging higher.

What the experts are coming to realize is that there is still a tremendous amount of money around for investment. They are also growing aware of the fact that Wall Street's stock market, which took the bad news with considerable equanimity, is quick to rise on receipt of good news from U.S. business.

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