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Technical Market Action The industrlal average moved into new high territory on Wednesday to reach an intra-day high of 193054. The rail average, at the intra-day high of 61.70, was still below the May 15th high of 63.07. As suggested in Monday-1 s letter, it appears that the long trading range, in which the averages had held for over three weeks, was a consolidating period and has obviated the necessity of a broad technical correction at this stage. It may mean that the industrial average can carry somewhat above the 195-200 area, wh1c h was my original projection for the first phase of the upward swing. The rail average may find the going a bit more difficult as the area between 63 and 68 is one of heavy congestion. However, individual rails appear to be behind the market. Despite the advance of the last four months, with stocks selling at their highs for the past twenty months, the market is still abnormally cheap on the basis of ratiO of bond to stock yields, on the basis of price to earnings and on the basis of dividends paid. In the last case this is particularly true when it is possible that many com- panies, with the completion of expansion, may be more liberal in their dividend policies. – There are a great many issues in our recommended list that are still available at a yield of over &,t or at a price of less than five or six times earnings. A few of these are listed below. American Radiator Bigelow Sanford Chrc.MiloSt.Paul,pfd Devoe & Raynolds Eagle-Picher Hewitt-Robbins Holland Furnace Northern Pacific Pittsburgh Coke Rheem Mfg United Merchants Western Pacific Rwy ungstown Sheet & T Approx. Price Div. 16 1.00 33 2.00 33 4 000 28 1.60 24 1.80 26 2.00 29 2.50 25 1.00 14 .60 23 1.60 20 1.60 33 3.00 84 5.00 Yield 6.2 6.0 12.0 5,7 7.5 7.6 8.6 4.0 4.2 6.9 8.0 9.0 5.9 1947 EarniB,gs 1.90 5.32 5,93 5 062 4005 4.39 4010 5.39 4.69 3048 5.36 4.01 13.31 Price to Earnings 801 6.1 5.5 5.0 5.9 6.0 7.0 4.6 2.9 6.6 3.7 8.2 6.3 June 9, 1948 EDMUND W. TABELL SHIELDS & COMPANY ClosiB,gs Dow-Jones Industrial DOW-Jones Rails Dow-Jones 65-Stock 192.56 61.25 70 091 The opinions expressed in this letter are the personal interpretation of cham by Mr. Edmund W. Tabell end ere not presented as the opinions af Shields & Company.