Dive

Something akin to the Bikini A-bomb wave hit the New York Stock Exchange last week. The first hour of trading on Tuesday started off at an easy pace. Suddenly motor stocks weakened and steels wobbled a bit. Then a flood of selling hit the market. The high-speed tickers fell behind. In the next hour 660,000 shares were traded, almost as many as in the entire previous day.

Lesser waves of liquidation inundated the market throughout the day. When the gong finally sounded, the Dow-Jones industrial average had dropped 5.32 points to below 200 (this market's "resistance point") for the first time since April. Almost 90% of all listed shares were down; 213 showed new 1946 lows.

By week's end the market had steadied enough for brokers to speculate on what had hit them. Many wondered if the big bull market, now in its fifth year, was over. Some traders guessed that jittery foreign speculators, who have a substantial stake in the market, had cashed in their profits. The big fact was that the market had gone down when most Wall Streeters, eyeing the expected rise of the U.S. price level, had expected it to go up.

The drop last week was not quite as bad as it looked; because of the "thin market," only a comparatively small amount of trading was needed to send a stock down, or up. But it was enough of a dive to scare off new issues. A secondary offering of 30,790 shares of International Harvester's preferred stock was withdrawn. Offerings of $20 million of Sunray Oil Corp. debentures and 1,000,000 shares of common stock were postponed. Sellers were having trouble reconciling their idea of what they thought they should get with what the market was willing to pay.

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