Winter Tonic

Wall Street traders, who like nothing better than juicy extra dividends, stock splits and fat earnings reports, got their share of all three last week and bid stock prices up accordingly.

The biggest surprise came from U.S. Steel, whose directors late one afternoon boosted the quarterly dividend 25-c-, to $1 and announced a two-for-one stock split, the first since May 1949. Next day the rush to buy was so great that trading in Big Steel could not open for an hour and a half; it finally opened at 78, up 5 1/2 points from the night before, and other steel stocks surged forward. Next day, traders were disappointed that Bethlehem Steel did not split its stock, as rumored, but were pleased enough by Bethlehem's fourth-quarter earnings ($4.88 a share v. $2.53 in the third quarter) and its $2.25 dividend, up 25-c- from a year ago, and $1 better than the past three quarters. During the week, the price of Bethlehem Steel climbed 8 7/8 points, to 116 1/4.

Copper Proppers. While its atomic-powered pride, the Nautilus, was undergoing her first diving tests General Dynamics declared a 100% stock dividend, and raised its cash outlay from $1 to $1.10 a quarter: the stock scooted up 14 3/4 points during the week, to 96 5/8. Remington Rand reported a third-quarter net of $5,003,268 v. $3,144,787 a year ago, and its stock jumped 6 3/8 points, to 40; giant General Motors reported quarterly net of an estimated $2.50 v. $1.60 m 1953, and near-record earnings of $806 million for the year v. $598 million in 1953, despite slightly lower sales ($9.8 billion). One of the most remarkable accomplishments: Railroader Robert R. Young's N.Y. Central tripled its December earnings (to $6,259,841, or 97-c- a share) over the 1953 figure.

As the good news came out the Dow-Jones industrial average rose 8.8 points, to 404.68, near the bull market peak.

The solid earnings and dividends were further backed by a still rising business level. The Federal Reserve Board's industrial production index rose one point, to 130, in December, and was probably up some more in January. Steel output, at 84% capacity, was the best in 14 months. With tension rising in the Far East, copper buyers scrambled to build their inventories. Last week producers jacked the price of copper by 3-c-, to 33-c- a lb., the first upward move in almost two years.

Mild Dose. Things looked so good that the Treasury Department decided to try something it has not dared touch since 1953. Secretary George Humphrey announced that holders of $2.6 billion worth of 2 7/8 bonds maturing next month will have the choice of exchanging them for short-term notes or a new 4O-year, 3% bond, the longest-term U.S. obligation since a 1911 issue to help finance the Panama Canal. Unlike the famed 3 1/4% 30-year issue of 1953, which was attacked as too drastic a credit tightener and soon fell below par, the new 40-year bond will raise no new money. At 3% it will not compete with long-term industrial financing. But it was a sure sign that the Treasury believes a mild anti-inflationary tonic is what the economy needs now.

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