Bulls on the Move

At the opening bell on the day after election, brokers swarmed around the 18 trading posts of the New York Stock Exchange, their pockets stuffed with buy orders. As big blocks of stock changed hands, prices surged ahead throughout the list. U.S. Steel jumped 2 3/8 to 58 7/8; General Motors racked up a gain of 2 1/2 to close at 92 1/2. Such stocks as Bethlehem and Westinghouse, which had sold ex-dividend only the day before, made up the amount of the dividends and more.

By day's end the heavy buying had sent the Dow-Jones industrial average up 7.54 points to 361.50, biggest one-day rise since the war market of Sept. 5, 1939. Next day the industrial average pushed ahead another 5.45 points and closed at 366.95, a new bull-market peak. The utility average, which had been sliding almost steadily for a month, spurted 1.16 to 58.94; the rails jumped 1.72 to 121.65, a new closing high for the year.

Investors took the election results as good news for several reasons. The mere fact that it was over removed a cloud of uncertainty--always a bearish factor--that had pushed the market down for five consecutive days the week before. There was no Democratic landslide as had been widely predicted, and that removed another source of uncertainty about possible future policy changes. And most traders thought that since unemployment seemed to have been a key issue in the campaign, both parties would do everything possible in the next two years to see that the economy maintains its current upward curve. Last week the upswing caused Bethlehem Steel to boost output at its Lackawanna, N.Y. plant to 97% of capacity, highest in a year.

No one expected any great change in credit or fiscal policies. One top Administration spokesman summed up: "I'm still hunting for the mandate to change our economic policies, and I don't see it." The post-election outlook:

Spending: The President plans to offer Congress a budget somewhat smaller than this fiscal year's $64 billion in spending (including appropriations held over from the year before) and $56.6 billion in appropriations, but defense spending will be about the same.

Taxes: The Treasury is considering another tax-revision bill, calling for a reduction in capital-gains taxes, a broadening of depletion allowances and a cut in taxes on foreign profits, but pro-business tax cuts will run into more trouble with a Democratic Congress. The Democrats will probably push for a boost in individual income-tax exemptions, and some excise taxes may be removed or eased.

Foreign Trade: Chances are greatly improved for passage of Clarence Randall's tariff-cutting program (see below). The new chairman of the House Ways & Means Committee, Tennessee's Jere Cooper, favors lower tariffs and freer trade, unlike his Republican predecessor, Dan Reed, who fought Randall's program.

Public Works: The President's ambitious, $101 billion, ten-year program for highway construction is likely to get Democratic support and thus be approved.

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