University Daily Kansan
Thursday. October 11. 1975
2
Market rallies after plunge; trading high
From Kansan wire reports
NEW YORK—Franked activist rockets and bond markets at the end of 2016 were yesterday in a convulsive reaction to the Federal Reserve's new plans for clamping down on borrowers.
However, Vice President Walter F. Mondale said in LS. Louis last night that the chaotic trading on the stock market appear to have slowed by late afternoon.
"Toward the end of the market today," he said, "a lot of institutinal investors came back on the market and the price lifted on about 20 points as a result.
"That suggests a lot of the large institutions investors felt that the stock market had dropped too far, and were worried about it. And they thought there were a lot of good buys."
Trading volume at the New York Stock Exchange reached a record 81.62 million shares, far outstanding the previous high of 66.37 million set Aug. 3, 1978.
The Dow Jones average of 30 industrial stocks, off about 28 points at mid-admittion, rose by 1.9 percent to decline at $49.82. That left the widest increase in 48 points of a loss more than 48 points since Monday.
Monday said such conditions were anticipated by the administration. So we need to keep the economy going we're trying to do in a prudent way, without having some effect in the short run on all of it.
"We think the initial reaction to this substantial effort by the Federal Reserve
Board has been quite encouraging, including the stock market."
Bond prices likewise came under intense pressure as the markets absorbed the shock of new record levels of interest rates. Tuesday, many of the nation's banks announced unprecedented increases of a full $1 trillion in lending rate, from 13% to 14%.
In world markets, the dollar dropped in foreign exchange, giving up some of its gains of the past two days.
The price of gold bounded over the $400-anounce mark on billion metals propelled by speculation about the latest U.S. gold auction and fears of more oil price hikes.
The gold price catapulted overnight by a record $25 to $14.90 an ounce in Zurich. In London it jumped $18.50 to $410 at the opening. The London price in the morning
was fixed at $409.25 and by afternoon was fixed at $413 an ounce.
Despite all the turmoil, many Wall Streeters continued to praise the Federal Reserve's decision last week to bring out new guns in its battle against inflation.
Many conceived that the new steps raised the odds of at least a moderate recession in the country, and this time for such important industries as housing construction and auto manufacture.
But they argued that whatever short term pain might result could be more than offset by the benefits of being against rapid infiltration, which many economists regard as a ticking time bomb.
this week did not qualify as any kind of "crash" like the devastating slide of 1929, when stock prices lost nearly 50 percent of their value over a few short weeks.
And they said the market's sharp declines
This week's slide, by contrast, represented a loss of between 7 percent and 8 percent, as measured by the Dow Jones average, through mid-afternoon yesterday.
"There is no earthy reason for a stock market panic," said Heinz H. Biel, a veteran market analyst with the brokerage firm of Janney Montgomery Scott Inc. (JMN) in a very constructive move. If it is successful, will avoid a major depression in the future."
"The Fed is running some risks here, but they are calculated risks," said William Griggs, a credit expert at the J. Henry Schroder Bank | Trust Co.
From page one
Any investigation will now be in the hands of the KCR, Samuels said.
John Sheppard, manager of Sheanigans, and Steve Comeau, manager of Bullwinkle's, said membership sales at both clubs were still frozen. Comeau said Bullwinkle's still was accepting applications for actual sales, but know when actual sales would be resumed.
Sheppard declined to elaborate on membership sales at Sheanigans.
Clarence Dillingham, professor of social welfare and former acting director of affirmative action at KU, said he was familiar with the alleged discrimination in Lawrence.
"I would hope that any investigation be conducted with the good faith and cooperation of everyone involved."
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