On Toward 1000

The New York transit strike made it difficult for brokers to get to lower Manhattan offices. But for anyone who reached Wall Street, the walk was worth it. In the past 69 years, the market has risen 43 times in January, to the point that the upsurge has become a post-Christmas tradition. But never has there been anything like last week. Day after day, the Dow-Jones industrial average broke its own alltime records. At week's end the average had reached 986.13, less than 14 points from the 1000 mark that the Street considers a mystical number. Even though that number may be more mystical than meaningful, the date of the breakthrough will appear in history books of decades, or perhaps even centuries, to come--and the date is not far off.

"If this activity continues," said Monte Gordon, research vice president of Bache & Co., "we will go through 1000 like a hot knife through butter." Gordon's exuberant prediction was based on a significant shift in market activity. The New York Stock Exchange in 1965 traded a record 1.6 billion shares, and the most active part of it was in speculative stocks. Harris, Upham & Co. keeps an informal kind of risky-stock Dow-Jones of its own. Says Senior Vice President Ralph A. Rotnem, "According to our figures, this is the most speculative market since 1959." Harris, Upham's speculative chart, however, peaked in mid-December, has drifted down since. The new activity, and the strength that will churn up the 1000 mark, is in blue chips.

The shift is due to a combination of outside forces. Investors are uncertain about Viet Nam and its effect on the economy; they worry over inflation, wonder about possible tax increases, fret, at least along Wall Street, about renewed rumors that the Government contemplates an excess-profits tax similar to that imposed on industry during the Korean War. And if only because of their uncertainty, they are starting to lay off stocks that even though presumably solid are still relatively cheap and considered to be speculative. At the old year's end and the new year's start, the heavy buying was in blue chips. Among these, of course, were steel stocks, and presidential approval of Roger Blough's pricing diplomacy sent steel stocks up.

Last but not least, Wall Street is perhaps the most superstitious of all business neighborhoods. And the omens look good: according to the lore of the Street, when the little odd-lotter starts buying heavily, the market will soon take a dive. But when the odd-lotter sells, the market will rise. Right now, he is selling. Anyway, all such tea leaves aside, the Dow-Jones average seems certain to pass the 1000 mark within days or weeks.

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