Worth Waiting For

At the start of last week, stock market analysts were trying to figure out why no price surge had followed Henry Kissinger's initial claim that "peace is at hand" in Viet Nam. Then on Tuesday the rally exploded, and it proved worth waiting for. In four days of heavy trading, with volume averaging 20 million shares daily, the Dow Jones industrial average vaulted 38 points to a close of 984. That was ten points above the year's previous peak and the highest level since December 1968--just after Richard Nixon was first elected. Last week many happy Republicans were loading up with stock in anticipation of a Nixon landslide. Small investors, who have been out of the market for a long time, also did much of the buying. In addition, Europeans were buying big in the U.S. stock market.

Stock traders who originally feared that the peace talk was too good to be true had become convinced that a ceasefire really will be signed soon. Said Harry Laubscher, senior vice president of Walston & Co.: "Whether peace comes this week or in a few weeks doesn't really matter. The public is apparently sure that there will be peace."

Roadblock. The public also appears convinced that prosperity will rise in 1973. Though unemployment is still far too high--it held at 5.5% in October --there is evidence of progress against inflation. Wholesale prices, which rose at a worrisome pace through the summer, slowed to the smallest possible seasonally adjusted increase in October: one-tenth of 1%. A Commerce Department survey showed that consumers plan sharply increased purchases of cars, houses, furniture and major appliances in the year ahead. Sales of many retail chain stores rose to record levels last month. Corporate profits for the third quarter are up about 20% from a year ago.

If the tentative settlement between Washington and Hanoi comes unstuck --and it could--the market would get a nasty shock. It also remains to be seen whether investors can surmount the roadblock psychology that in the past has often caused them to start selling shares whenever the Dow Jones average gets close to 1000, a mark above which it has never closed. That attitude smacks more of mysticism than analysis; stock prices would be very little higher in relation to business profits and the strength of the economy at 1000 on the Dow than they are at 984. For what it may be worth on Wall Street, the celebrated Las Vegas oddsmaker Jimmy ("the Greek") Snyder is giving even money that the market will crack 1000 before New Year's Eve.

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