The Good Wife

"The market is like a good wife," says the August investment letter of Hayden, Stone Inc., "sometimes delightful, sometimes a drag, largely unpredictable, but on the whole a good long-term holding." Last week the good wife of Wall Street was in one of her enthusiastic moods. All summer, such indices as the New York Stock Exchange composite hinted a bull market was building. Last week the Dow-Jones industrials established this year's high to prove it.

Monday's market, after an 8.03 point drop the week before, made a strong try at gaining back the loss; at midday the industrials were up 7.34 points, but they fell and finished with only a 2.71-point gain for the day. On Tuesday, with 12,290,000 shares traded, the Dow managed to hold its gain; it finished 8.73 points up, and the industrial average stood at 912.97. The upsurge prompted so much eager buying on Wednesday that the New York Stock Exchange recorded its fourth busiest trading session in history. A total of 13,510,000 shares changed hands, and the industrial average went up another 9.3 points. So confident was the market that even President Johnson's call for a 10% tax surcharge failed to have a lasting effect. Thursday's market fell nearly ten points immediately after the tax message was made public. But by the closing bell, almost all the drop had been wiped out, and the loss for the day was a minuscule .29 points. On Friday the industrials went up 1.79 points for another 1967 record and a five-day gain of 22.24 points.

The market was strong partly because many investors again see portents of inflation, and stocks are considered a sensible hedge. Also, there was economic news to balance the tax message. New factory orders and construction contracts are increasing, inventories are decreasing, and steel production took an upward turn. While reporting generally unimpressive first-half earnings, most executives have hastened to add that from their vantage point they think they see the up sign.

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