Tabell’s Market Letter – January 18, 1957

I Walston &- Co. Inc. Members lVew York Stock Exchange NEW YORK PHILADELPHIA LOS ANGELES ,AN FRANCISCO BASLE (Swaml.nd) OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM TABEll'S MARKET lEnER January 18, 1957 Crosscurrents continue to affect the market. The Dow-Jones Industric average has now held roughly between 500 and 460 since September, roughly c 8 1/2 trading range. The Standard & Poor's Composite average, perhaps an even more narrower accurate refl range between ercoutigohnlyo3f78theandge3n5e2r.al market, has held in an even Meanwhile, leadership has shifted from group to group and many stocks have had worthwhile moves while the averages were doing nothing. Once oagain-the-futili.ty of- trying- to predict-the maik-et!'–is indica,te. It is entirely possible that the averages may return to the lower part of t e 500-460 range. It is also possible that individual issues will continue to have worthwhile upside moves simultaneously with a decline in the averages. Indeed, during the uncertain market of the past two weeks exa'ctly this type of action has occurred. . Issues connected with the defense program have continued to fare well . on announcements of awards of guided missile contracts and on prospects for continued high arms spending. The higher prices accorded these shares by the f(4ie4d c3bu/ 8yr)r e1nw95th7i sc phe aerrcenucilneagnt istvl. ye enthusiasm are expected to be more than amply Included in our recommended list are GLENN L. made a new high, and GENERAL DYNAMICS (5b justiMART' Issues associated with natural gas, such as PANHANDLE EASTERN PIPE L' (53 1/8), NORTHERN NATURAL GAS (52 3/8) and CHAMPLIN OIL & REFINING (27 have been market leaders on the upside, stimulated by the President's budge message calling for exemption of natural gas producers from federal regula- tion. U. S. LINES (34 1/4) also on our recommended list, has recently shown strength on news of the prospective shipping boom and expected increased earnings. , ' On the weakness side of the list; last week was characterized by a minor slump in the price of steel shares, accomR.aniedby.. rep.Qrts.9f slacken – in-g steel –Close -exarifihation of st-eel pros- pects would seem to indicate that most of this pessimism is unfounded. Auto demand will, of course, not be as high as originally predicted, but it will may not in any case be higher than last year's. While the steel operate at full capacity, as was done for three quarters oinfd1u9s5tr6y, earnings should as in most cases i ncrease the last s1u5bstoafntsitaelleyl due to a capacity more even operating level, is marginal and produces only slightly better than break even 1 sults.Meanwhile, the shortage of many steel items continues and price inc ,cases offsetting higher labor costs are in prospect. Technically, most steel stocks are just above strong support and would appear to be excellent purchases around current levels, despite the fact that more consolidation may be required. Recent important news items have appeared on many companies in our recommended list. These reports state that New York Central Railroad is planning to spend 43 million for electrical traffic control systems. TSIhGiNsAwL o(u3l0d 1as/2su) r e a continuing high which handles most operating of Central level for 's signal GENERAL equipmen t RAIUJAY businesfr. Further gains appear.to be in prospect for General Railway Signal's earn- ings. CARRIER CORP. (58 1/2) recently revealed that it has acquired an ,important minority.interestinElliott Company, a producer of drive motors-'and other electrical equipment used in Carrier's products. The close rerationship with Elliott should add to Carrier's efficiency. With the air-conditioning industry entering a new field, Carrier appears attractive at current levels. RAYONIER (31 1/2), also on our recommended list, disclosed that it has been holding merger talks with Hammermill Paper, Consolidation should be beneficial to both companies. AWTamb EDMUND vI. TABELL WALSTON & CO. INC. ,