Wall Street: Volume & Vigor

When the closing bell sounded at the New York Stock Exchange last Friday, floor brokers ended one of the more somnolent sessions of 1967: a mere 8,130,000 shares changed hands. Only last year, volume like that would have meant headlines. But no longer—for Friday’s bell also rang out the biggest, fastest trading quarter in Big Board history.

So far this year, 615 million snares have been traded on the exchange, far outracing the previous record of 540 million shares traded in the first quarter of 1966. Average daily volume, now 9,900,000 shares, has jumped 30% over 1966’s 7,500,000 shares. On 32 of the quarter’s 62 trading days, volume has marched past 10 million, and hardly a session now goes by when the Big Board’s high-speed ticker does not at some point fall behind the pace.

Most of the push has come from the professionals, particularly the mutual funds. During the troubled trading of 1966, according to figures released last week by the Securities and Exchange Commission, the funds bought and sold a record $19.7 billion worth of stock—nearly as much as in the two previous years combined. Fund managers, who switched only 19% of their stock holdings in 1965, last year shuffled 32% of their portfolios to make the best of the long bear market.

Despite a third-quarter scramble, in which sales outran . purchases by $260 million, the funds sided with the bulls, ending the year as net buyers of more than $1 billion in stock. And even though slumping prices trimmed the total value of their holdings by $2.3 billion to $31.2 billion over the year, the open-end funds came through 1966 far better than the market as a whole. The value of all U.S. stocks plunged by 13% to $587.4 billion. But the funds’ portfolios dipped only 7%, which left them in fine shape to lead the bargain-hunting charge that, more than anything else, has accounted for the 1967 market’s bullish big volume and upward movement.