In the Day's Hews
By FRANK JENKINS
Let's talk todav (this is
fc v xucauajr auvufc uic
stock market. It's acting in
a rather peculiar way.
For example:'
The bulk of the business
news is well over on the pes
simistic side. The steel indus
try is operating at about half
its capacity. The automobile
industry - is in anything but
good condition. It has an in
ventory of about 800,000 un
sold cars. Unemployment con
tinues high, and isn't declin
ing as rapidly as it normally
should at this season. Earnings
reports for the first quarter of
1958 are not encouraging.
And so on.
A ND yet
This morning's financial
reports informs us
New York stocks continued
their rise into NEW RECOV
ERY HIGHS at an active
opening. The list closed yes
terday afternoon with all the
averages at new highs for
1958.
The market opened still
higher this morning.
WHAT does that mean?
" It must mean that the
people who buy shares in
American industry have con
siderable confidence in the
future. They must not be
VERY much afraid that the
recession will turn into a de
pression.
Why?
-Well, when people are
scared of the future they are
inclined to sell.
When they have confidence
in the future they are inclined
to buy.
YESTERDAY'S and this
moraine's situation on the
stock market has an interest
ing technical background.
For weeks the so-called
"short interest" has been
very high. Let's see if we can
explain here what a "short
interest" is. When speculators
think prices are going to go
down, they "sell short." That
is to say, they contract to sell
shares, of stock THEY DON'T
OWN. They agree to deliver
these shares at a certain price.
If the price goes BELOW the
figure at which they have con
tracted to sell, they can buy
them at the market and DE
LIVER AT A PROFIT.
fFlHAT bring us back to the
situation that has develop
ed in the stock market. The
financial reporters tellf us: ,
"The list closed yesterday
with all the averages at new
HIGHS for 1958. This brought
in some NEW BUYERS and
gave the bears ("bears" are
.are betting that prices will go
lower) another scare." '
So .
. These "short" sellers BE
' GAN TO BUY this morning.
They began to-buy because
they feared that prices would
GO STILL HIGHER, thus in
creasing their losses on the
shares they sold but didn't
have. -
This short interest buying
tended to push prices up
farther.
SO MUCH for the technicali
ties of the situation. What
it seems to boil down to is
that buyers have considerable
confidence in the future of
business and industry in the
United States of America.
That is highly important.
If the people of this coun
try retain their confidence in
the future, our American
economy will straighten itself
out and come out all right
in the long pull.
Ho Serious Flood
Threat in Portland
Portland Wl The
weather bureau predicted
Wednesday that no serious
flooding will be experienced
this War in the Portland-Van
couver area.
Regulated river stages of 18
to 21 feet were expected in
Portland and Vancouver har
bors late this month and early
in June. Flood stage in the
Willamette at Portland is 18
feet and in the Columbia at
Vancouver it is 15 feet.
River Forecaster Elmer
Fisher said that the predicted
stages would cause no "se
rious" flooding but that low
level docks and pasture lands
along the Columbia would be
flooded.
The stages forecast Wednes
day were about 10 feet below
the level 10 years ago when
Vanport was flooded. Fisher
said predicted stages assumed
normal temperatures and pre
cipitation during the critical
snow-melt period.
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