Watching & Waiting

The New York Stock Exchange last week announced that more Americans than ever--20 million in all, or three times as many as 13 years ago--now own stock. The fact was impressive, but few cheers were heard on Wall Street. Reason: not many of the 20 million seemed to be doing any buying. Confused, uncertain and frequently just plain listless, the stock market drifted down for the sixth straight week, sold off heavily on one day and closed the week with a loss of 24.75 points on the Dow-Jones industrial average. At 854.42, the market had reached its lowest point in ten months, was no longer within hailing distance of the 939.62 high it had hit in mid-May.

It was not that there was sustained selling pressure; it was just that no one seemed very anxious to buy. "The tape wasn't huffing and puffing, let alone skipping digits," said Monte Gordon, chief analyst for Bache & Co. "When there's selling pressure, believe me, you really feel it on the floor." The market broke sharply and declined 12.46 at midweek, going through the previous week's low and causing brokers to brace for a weekend selloff. It never came. The averages vacillated between gain and loss at week's end as investors obviously tried to decide just what they wanted to do. Chartists who follow the complicated Dow theory of market prediction debated whether the market had given a bear signal by piercing last December's low of 857.45, but came to no general conclusion.

A measure of the market's uncertainty was the unwarranted attention it continued to pay to even the remotest news event or speech. Washington kept on trying to calm that uncertainty. After lying low for a while, William McChesney Martin Jr., who helped to precipitate the sharp market drop with his speech citing similarities between the current economic situation and that of the 1920s, joined the calming team. President Johnson had him conspicuously on hand when he signed the excise-tax-cut bill, passed him one of the pens. Next day, Johnson trotted out Martin (along with several Cabinet officers) to give a reassuring reading of the economy at a White House dinner for 50 top businessmen and labor leaders. If Martin's arm had been twisted, he took it without a grimace.

Speaking later at a Rutgers University commencement, mostly about the balance-of-payments problem, Martin made wry reference to the fuss he had stirred up. "Recent experience has taught me to be wary," said Martin. "If I should venture to compare our life and learning today with that of Greece in the 5th century B.C., or that of Rome in or after the 1st century B.C. or A.D., I am sure there would be some who--no matter what I said about differences as well as similarities --would interpret my remarks as a prediction that we will be overrun by barbarians. Nor will I venture comparisons with historic periods in the American past. If I should so much as mention the year 1814, for example, I daresay there would be some to accuse me of advocating that the city of Washington be put to the torch again."

That showed that Bill Martin has a sense of humor, but the amusement of stockholders was somewhat muted by the fact that since he made his 1920s speech at Columbia University on June 1, they have seen their stock values pared, on paper, by $34 billion.

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