Wall Street: Bullish Mood

“The market is terribly high—and it’s going higher.” So last week predicted J. Eugene Banks of Brown Brothers Harriman & Co., reflecting Wall Street’s widespread belief that its new bull has hardly begun to frolic, and that the Street is in for a long market rise. Although stocks backed and filled for most of the week, the Street’s excitement was kept up by the upsurge in rail shares. Rails broke through their previous high to reach 150.81, thus, according to the Dow theory, “confirming” the signal four weeks ago of the Dow-Jones industrial average that a bull market was on.

Even Pennsylvania Railroad stock was bought heavily, despite the announcement of a $9,000,000 deficit for the year’s first two months, one of the biggest in the road’s 114-year history. Wall Street did not need the rails to tell it that it was in a bull market. Only a few weeks ago, most brokers were hedging every prediction with careful qualifications; now the new sense of expectation was so infectious that few had eyes for anything but the climb ahead.

Extremely Positive. “This market is less than six months old,” said Richard Russell, the Street’s chief Dow theorist. “and there’s been only one bull market in history that lasted only six months, and that in 1938.” Odd-lot figures showed that the small investor was still selling on balance (see below). Free credit balances—the cash customers have on hand at their brokers—reached a record high, indicating that many investors are holding back from getting into the market. Most bro kers welcomed the public’s hanging back as a healthy sign, since many believe that the public buys at the market’s top; they feel that the bull market so far has been dominated by such professionals as the institutions and mutual funds. Said Walston & Co.’s Anthony Tabell: “Technically, the stock market continues to act extremely positive. There isn’t any available indi cator that shows any sign of internal weakness. And there is no evidence of excessive public participation.”

Wall Street suspects that one reason the public is not more enthusiastic about the new bull is that the Dow-Jones aver ages are not accurately reflecting the new market’s real steam. Experts point to the rapid price rises of stocks not represented in the Dow-Jones averages, the large number of new highs hit each day. and the movement of Standard & Poor’s index of 500 stocks, which has already hit a new alltime high. The Dow-Jones averages also contain many stocks that have not partici pated proportionately in the rise, such as oils, metals and autos.

No Corrections. Aside from the danger of a serious international crisis, such as in Laos, Wall Street’s professionals expect the industrials to test their previous high of 685.47 quickly — and to pass the test with flying colors. Though everyone ad mits — rather grudgingly — the possibilities of a “technical correction” that would bring stocks down, few on Wall Street expect it. Says Winthrop Knowlton of White, Weld & Co.: “There’s certainly a better chance you’ll make money buy ing stocks than you will by sitting on the sidelines or selling.”