Comeback

Wall Street bounced back last week from the August slump brought on by the first alarm over the Suez crisis and the Federal Reserve Board's damping down of credit (TIME, Sept. 3). As investors began to pay more heed to good news at home rather than bad news from abroad, the Dow-Jones industrials jumped 5.62 points in the first trading session after Labor Day, one of the biggest gains in months. Wall Streeters took the upswing as a bright omen: the market after Labor Day has often forecast the trend for months to come; e.g., the wartime bull market ended in the week after Labor Day in 1946, the Eisenhower bull market started in late September 1953. The average closed the week at 506.76 v. 502.04 the week before.

The big leaders were aircraft companies and steel. On the New York Stock Exchange, U.S. Steel, Jones & Laughlin, Republic Steel, Crucible Steel and Allegheny Ludlum sold at new highs as mills pushed up to 98% of capacity and the backlog of steel orders assured peak operations for months to come.

More Capacity. To increase production even further, U.S. Steel Corp., which expects to invest $2.5 billion over the next five years to step up output, last week asked the Government for a fast amortization certificate for a $94.4 million expansion at its Fairless Works in Morrisville, Pa. Other steelmakers have filed requests for another $322 million.

Overall, U.S. industry's expenditures for capital improvements in the third quarter are running at an annual clip of $36.26 billion v. $29.65 billion this time last year, the Securities and Exchange Commission estimated this week. Despite the high cost of hiring money. SEC figures the capital improvement rate will jump to $38 billion in the fourth quarter, more than $6.5 billion over last year's December quarter. New construction was at a record annual clip of $44.3 billion v. $43 billion spent on new construction in all of 1955.

More Rises. Amid this outpouring of bright figures. Washington noted one dark statistic: agricultural prices dropped 3% in the month ended Aug. 15, but were up 2% from August 1955. But other prices, rising on a broad front for the past month, kept going higher. Rises were announced in the prices of office typewriters (5% to 12%), in some truck andconstruction equipment (1.7% to 6%), in the tin plate used for food cans (1.25%). Nevertheless, in August, when most consumer rises went into effect, sales in U.S. department stores were 5% more than the year before.

The auto industry finally climbed out from under its swollen stocks of new cars; inventories were estimated at only about 500,000, and prospects were bright that many dealers would be out of cars before the 1957 models came out. As the automakers started to taper off production for the changeover, they got together to plan their cooperative assault on the public at the New York auto show on Dec. 8, the first time in 16 years that all the carmakers would show off their new models in a national, industry-sponsored show. Among them: Ford Motor Co., which has stayed out of the Automobile Manufacturers Association since Henry Ford boycotted it 43 years ago. To the delight of his competitors (see cut), Henry Ford II was finally welcomed into the fold last week. The optimistic automakers, counting on major body changes to make 1957 a banner year, are planning, as a start, to turn out 1,750,000 cars in this year's fourth quarter.

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