The Week's Chart

The stock market, which had the wind knocked out of it by poor third-quarter reports, continued to drop last week. Industrial averages reached their lowest point since last July. Even stocks like Jersey Standard, whose net profit reached a new high (see Earnings), went down in the heavy selling. Many an investor was plainly undecided about the future-and such investors usually sell and sit on the sidelines while they make up their minds.

Did this mean that all U.S. business was in for a slump?

Bethlehem Steel's Chairman Eugene Grace took a hard look at steel production. Although Bethlehem's unfilled orders are at a peacetime high, Grace said gloomily: "I can't see anything but overproduction -and soon-in steel." Another downward sign came from the paper industry. Unfilled orders for paperboard, traditional bellwether for all other paper products, were off 40% from a year ago. And from the Federal Reserve Board came word that because of slack demand, production of many consumer goods had been cut considerably below the levels authorized by NPA.

But other signs pointed upward. Purchasing agents found that the pickup in orders, which started in September, was continuing. Auto sales have recently been running ahead of production, and the industry expects output to fall far behind sales next month. TV and appliance sales are also pulling out of their summer slump. Department-store sales, said the Federal Reserve Board, jumped 10% over the 1950 level in the latest weekly figures, the biggest rise in six months. And the biggest spending of the arms program-and greatest civilian cuts-is yet to come.

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