Just a Mild Surprise

Said one broker: "VE day won't be a shock to the market. It will be just a mild surprise."

Last week, there was evidence that Wall Street's lusty bull market was ready to take the end of the German war in its stride. In six bustling days of trading, the market climbed. At week's end, the Dow-Jones industrial averages were up to 164.71, highest point since the end of the booming bull market of 1937.

It was a poor stock that did not have its fling. Nor was there any sheep-&-goat distinction between war & peace stocks. War-plane-building Douglas Aircraft Co. climbed four points in a few hours to a new high. Right along with it were Chrysler Corp. and General Motors Corp., who hope to make plenty of money in peacetime markets.

The fact seemed to be that the market was well over any reconversion jitters. Now that the shift from war to peace-had started (see Transition), the medicine was not as bitter as it had looked in the bottle.

Worrywarts gloomed that the market might not perform as expected, because it seldom has, during the war. For example, when the fall of the Philippines forecast a long, bitter war, the market started up. Reason: the war was bound to bail out many a floundering company. Stocks fell soon after Dday, at the prospect of an early peace, fell again when U.S. troops jumped the Rhine. President Roosevelt's death gave them a lusty boost (TIME, April 23). Perversely, in the fa ce of an end to the German war, they have risen ever since.

Last week, the market barely shivered at something which has caused a slump before: the prospect of a margin boost (to

100%) to nip the hidden boom. The Federal Reserve Board is well aware that market averages, because they take into account only a few stocks, no longer show the overall rise in stock values as they once did.

Now, with much buying of cheap stocks, the market value of all stocks has risen nearly twice as high as the averages (see cut). But brokers are as unconcerned over any margin boost as they are over V-E day. The reason: most stock buying is for cash. As long as it is, they are confident that the market is firm enough to withstand any peace shocks in prospect.

This file is automatically generated by a robot program, so reader's discretion is required.