Over-the-Counter Revival

While the New York Stock Exchange continues to show gains, a much broader but less-known market is rising even faster. Last week the National Quotation Board's index of over-the-counter stocks closed at a record 192.37, up 8% for the year so far, v. a 3 1/2% rise for the Dow-Jones. Last year the OTC index jumped 23%; the Dow-Jones advanced 15%.

Most of the 7,000 issues traded daily over-the-counter represent companies that are not sufficiently large, seasoned or profitable to be listed on the major exchanges. But the OTC index of 35 stocks includes such mighty companies as Anheuser-Busch, Ethyl Corp., Rockwell Manufacturing, Grolier, Eli Lilly and Dun & Bradstreet. They are a remarkably reliable mirror of the entire OTC market: the most recent study showed that the average price of 538 nationally listed OTC stocks gained at a pace that was virtually identical to the OTC index's gain.

If rewards are great on the OTC market, so are the risks. The OTC average fell farther than the Dow-Jones in the 1962 market break, took longer to recover. That shock made investors shrewder, and their recent revival of interest indicates that the OTC market has generally become more solid.

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