The Brave Bulls

In Wall Street, baffled brokers did not know what to make of things. Despite the strikes in steel, coal and aluminum, which had thrown at least 1,000,000 out of work and caused the worst postwar shutdown, the stock market kept right on going up. Last week, in some of the busiest trading of the year, the Dow-Jones industrial average rose 1.59 points to 186.78, a new high for the year.

Leading the market were the television shares, notably Admiral Corp., which declared a 100% stock dividend. For those who still swore by the Dow theory, regardless of its confusing "signals," there was also reason to cheer. The railroad average, lagging behind the industrial, now broke through last March's "resistance" point. To some Dow theorists, that was a sign that a bull market was in the making.

From the Federal Reserve Board came more bullish news in a survey of consumer buying. Despite the recession in the first half of the year, FRB found that few consumers had curtailed buying plans. FRB also noted that consumers were, by & large, counting on a continued high level of income--and with good reason. Personal income for the first eight months of the year, the Department of Commerce reported last week, was at a record rate of $212.6 billion, some $3.2 billion more than in the same period last year.

The bears, on the other hand, argued that the inventory boom which had started in August was already tapering off, and that the strikes were bound to give the economy another push down. Even if the walkouts were settled soon--and there was no sign of that--many a company was bound to feel the effects on its fourth-quarter earnings. Gloomiest talk of all came this week from Secretary of Commerce Charles Sawyer. He said that the strikes had already checked "the upward trend in business and employment," and that there would be "serious damage to the economy" in a month if the steel strike continued. If the strikes last till Nov. 1, he said, there will be 2,000,000 out of jobs. If they continue until Dec. 1, there will be 5,000,000.

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