Wall Street: Aiming Higher

In the busiest stock-exchange trading since the 1962 crash, bulls and bears tugged furiously at each other last week but did little more than leave millions of shareholders confused and wondering what would happen next.

Trading on the New York Stock Exchange averaged more than 8,000,000 shares a day; in the first hour of one session, 2,930,000 shares changed hands, more than in any hour since 1929. As bystanders watched eagerly to see if the Dow-Jones industrial average would crack its historic high of 939.62 set last May, stocks bobbed back and forth. They started the week on the upbeat, then turned lower, then higher, then lower again and finally came to rest at 930 — up only half a point for the week. At the height of trading, the exchange’s high-speed ticker ran twelve minutes behind, but had it not been for this new, computerized equipment, the tape would have lagged by 90 minutes, and many an investor would have become frightened.

Most of the trading was done by the big professionals, notably brokerage firms dealing for their own accounts. They both bought and sold, and the net effect was a standoff. There was a lot of switching, as traders sold such recent high flyers as Xerox and Fairchild Camera to get profits that they could plow into stocks that they felt were good bargains. Large institutions — insurance companies, mutual funds and pension funds — were also active, as evidenced by the great blocks of stock that changed hands: 17,200 shares of Chrysler; 53,000 shares of Cleveland-Cliffs Iron, 80,000 shares of Sperry Rand. But the little man played a little role. Trading in odd lots of fewer than 100 shares accounted for only 7% of the volume.

Feeding the Bulls. What next? Some Wall Streeters, noting that the market had jumped 35 points in the past month, figured that it was due for a correction — a minor and temporary decline of 3% or 4% . Others reckoned that last week’s pulling and pushing set the base for a blowoff, or sudden and possibly spectacular advance. Many Wall Streeters were predicting that the Dow-Jones by year’s end would top 1,000, a goal that seemed almost impossible to achieve just a few weeks ago.

All the portents were bright. Abroad the war was going better in Viet Nam and the Red Chinese had backed down from their threat to charge into India. At home, economists at a meeting of the National Industrial Conference Board almost unanimously predicted that business would rise through 1966. Barring an unexpected reverse, Wall Street’s bull seemed to face few hurdles.