Biggest Rally

The stock market last week made the biggest one-week rally in its history, rolling up a spectacular gain of 25.90 on the Dow-Jones industrial average. The market advanced steadily through the week, was turned back slightly at week's end by profit taking after the sixth successive rise. It ended the week at 654.88 on the industrial average, highest since Jan. 15, adding nearly $10 billion to the value of stocks on the exchange. The business picture had changed little, but Wall Street's psychological mood had obviously changed, and the bulls roamed the Street with little resistance.

All this was embarrassing to the Dow theorists and to others who had been predicting a big bear market. They had based their predictions on the fact that the industrial average in February broke through its previous low and had been followed by the rails breaking through their lows, the theorists' signal for a bear market. But last week the industrials rose through their previous resistance level of 636-638, and the rails came within an inch of rising through their previous high of 146.56. If they break through, the chartists will be ready to concede that the present "bear" market is over.

The big institutions and mutual funds were coming back into the market in force, giving the hitherto neglected blue chips a handsome advance, along with the glamour stocks. But not all stocks were going up, and the 30 stocks in the Dow-Jones average did not accurately reflect the fate of many depressed stocks that are still down. Even during last week there was a sizable number of new lows for the year. Many traders believe that before the market can sustain its advance, more stocks will have to participate in the rise, and new highs will have to outnumber new lows by a bigger margin. If this happens, says Walston & Co.'s Edmund Tabell, "the market could become very bullish"--and the next objective could well be 750 for the industrial average.

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