Fission & Fizz

The big bull market last week reached a goal that market seers have predicted for two years might be the top. The goal: 250 on the Dow-Jones industrial average, a rise of 56 points since the slump after the outbreak of the Korean war. But after hitting 250, stocks kept right on rising, and at week's end the market hit 253.92, highest point since June of 1930. This week despite the tax bill and rail strike (see NATIONAL AFFAIRS), the market rang up still another new high of 255.17. The upsurge was so impressive that even the seers are now chary of saying how high the market may go.

What swept the market along was a wave of stock splits, which always make the market more inviting. On the same day that Standard Oil Co. (N.J.) announced plans to give stockholders 2 shares for 1, the stock jumped 1 3/4 to 100 5/8. Next day Atchison, Topeka & Santa Fe Railway proposed a similar split, and its common soared 5 1/2 to 165. All told, there were a dozen stock splits or stock dividends proposed or approved last week. Only a week before, three big oil companies--Phillips, Gulf and Texas--had split their shares 2 for 1, adding a whopping total of 31,184,000 shares to the Big Board's trading list. And last week Standard Oil of California stockholders approved a 2-for-1 split.

If stock splits help push the market higher, a high market is also the cause of stock splits. In the bull market, many stocks have climbed too high to be popular, i.e., above $50 a share. As a result, during 1950, by splitting the stocks, corporations have cut the price and broadened the ownership. General Motors gained 10,439 new stockholders last year after the 2-for-1 split, which gave it the world's biggest stock issue (88,208,680). Standard Oil's split, if approved, will give it some 60,500,000 shares.

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