Knee Bends on Wall Street

The experts' uncertainty about which way the U.S. economy is going was nowhere more sharply reflected than on Wall Street's stock market. Like a ballplayer trying to work out his muscle kinks with knee bends, the Big Board bounced up and down last week; market leaders in steel, oil and aircraft tumbled as much as 2 1/2 points in a day. On Monday, the Dow-Jones industrial average skidded 9.25 points to 478.95, for the market's sharpest break in nearly two years. Though intermittent rallies flickered across the floor at midweek, they could not make up the loss. More selling pushed stocks lower still, until by week's end the total attrition stood at 12.46 points, bringing the Dow-Jones average to 475.74, the lowest level since April 2 and only 20.92 points above the 1957 low.

While the market's erratic performance turned many Wall Streeters bearish, few experts cried doom. Instead, they saw the downtrend as an orderly retreat from early summer's unwarranted high level, which brought the market within a point of the alltime 521.05 peak set last year. The selling waves were generally light-average daily volume was less than 2,000,000 shares--a sign that investors are not discouraged and intend to wait out the slump. Most big institutional investors appeared to be switching to other stocks instead of leaving the market altogether; there was no sudden rise in bonds to match the decline in stocks.

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