Summer Rise

Wall Street's bull market last week made its biggest weekly jump of 1959. The Dow-Jones industrial average scooted up 15.51 points to close at 654.76. It was well above the previous alltime high of 643.79 set May 29. and more than 70 points ahead of where the average started on Jan. 1. Brokers expected the climb to continue. Not only was business news generally bright, but the record showed that industrials have advanced smartly in July and August in two years out of every three during the 20th century.

Steel stocks were among the strongest, despite the strike threat (see below); investors recalled that steel shares showed marked gains during the 1956 strike, and that historically they have moved up after strikes. Many steel stocks topped their historic highs. Among them: Armco (up from a 1959 low of 64 1/8 to 77), Inland (up from 43 3/4 to 53 5/8). U.S. Steel (up from 88 3/4 to 103 5/8).

Not every investor struck pay dirt. Several solid issues scraped their year's low. American Export Lines (which hit a crest of 34 5/8 this year) slipped to 28 7/8; Freeport Sulphur slumped to 27 5/8 from the year's high of 37 3/8. United Aircraft, one of the stocks in the Dow-Jones average, was off to 52 1/2 from 66.

In the 1959 rise, whole groups of stock have been left behind. Aircrafts were caught in an earnings downdraft caused by heavy investments in the new jets: during the first half Boeing skidded nine points to close June at 37 1/2, Douglas dropped 10 1/2 to 47 1/2. Oils were burdened by heavy inventories and price cuts: Royal Dutch dipped 5 3/8 to 42 1/2; Standard (N.J.) slid to 51 5/8; Gulf worried off 16 to 110. Among utilities, losses from two to five points hit Consolidated Edison, Southern California Edison, American Electric Power.

Still other industrial groups blew hot and cold in the first half. Among elec tricals, General Electric rose only 1 7/8to 80 3/4 but resurgent Westinghouse climbed 21 3/8 to 94 1/2. Among motors, an investor could hardly go wrong (Chrysler up 17 1/8, Ford up 24 1/4)--unless he selected solid General Motors, up only i 7/8 to 51 3/8.

As for dividends, the blue chips were yielding about 3% last week, and some of the racy electronics and missile favorites were paying nothing at all. Meanwhile, back in the bond market, the tax-exempts were yielding a handsome 3.8%, while the highest-grade corporates also moved above 4 1/2%. The yield spread between common stocks and bonds was uncommonly wide. Classically, the situation called for a move out of stocks and into bonds. But investors--wagering heavily on the economy's growth, figuring on more inflation and preferring capital gains to dividends--showed no signs of hopping off Wall Street's snorting bull.

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