Stabilized Market

"When everybody is cautious," runs an old Wall Street adage, "the danger is about over." Last week there were signs that Wall Street investors were beginning to tread softly because of the worrisome speculative fervor of recent weeks. The New York Stock Exchange was so concerned at the rush for low-priced stocks that it asked members to discourage uninformed speculation. Brokers themselves started to boost house margin requirements on lists of volatile stocks. Others took to the newspapers with ads warning small stockholders not to try for quick killings. The effect was like a tonic on a market that had seesawed aimlessly for nearly three weeks. At the end of a smart two-day rally, Dow-Jones industrials closed the week at 611.93, a gain of 4.41 points.

The strength came from a new move into the old blue-chip favorites by big investors who were sitting on the sidelines waiting for the big board to settle down. Buyers rallied to International Business Machines after President Thomas J. Watson announced a 3-for-2 split and an increased dividend; they bid for Ford after Ford Foundation successfully sold an additional 2,000,000 shares of Ford common without trouble. At the same time, such speculative favorites as General Development and Universal Controls (TIME, March 30) ran into waves of selling, were sporadically held off the market when trading volume on the American Stock Exchange got too great.

Few experts look for another spectacular rise in the next few months. One factor is that the shortage of stock is easing as more and more issues come on sale to sponge up excess funds. The Securities and Exchange Commission reported a record 171 filings in March for issues of $2.2 billion.

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