Warning for Speculators

When the going gets rough on the overcrowded floor of the New York Stock Exchange, brokers with any ailments--sprained shoulders, sunburns or broken arms--pin red crosses on sleeve or back to warn off scurrying colleagues. Last week even brokers thus armed could hardly avoid a jostling. In furious trading inspired by the new bull market, volume on the exchange in one day leaped to 7,080,000 shares, highest mark in 5 1/2 years. The tape ran late so often that the warning clock that signals the tape's tardiness was lit for hours at a stretch. As active stocks climbed to new highs, brokers let out great whoops. Trading on the American Stock Exchange was also heavy and hectic, with the biggest daily volume (3,872,420 shares) since 1929.

Observing all this bustle, New York Stock Exchange President Keith Funston decided that it was time to pin a red cross on speculators lest they get hurt. Disturbed by reports that many investors were scrambling to buy shares in firms "whose names they cannot identify, whose products are unknown to them and whose prospects are, at best, highly uncertain," Funston delivered a sharp warning: "It is impossible to get something for nothing. Stock prices go down as well as up. Don't invest on the basis of tips and rumors."

Most brokers believed that the heavy speculation was being done by semipro investors who were switching from sound to risky investments (often in the more volatile over-the-counter market) in the hope of a quick killing in the rising mar ket. Bankers, also concerned about the speculative spree, reported a startling number of fund transfers from savings accounts to brokerage firms. Funston's warning slowed the market down a bit; volume slacked off and prices steadied. But by week's end the market was off and running again. It gained 7.05 points for the week to close at 683.68 (on the Dow-Jones industrial average), less than 2 points below its alltime high.

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