WALL STREET: State of the Market

In relation to production, U.S. common stocks last week hit the lowest point since World War I. Although industry has jumped output nearly 30% since last spring, stock prices have marched the other way, are now 22% under a year ago (see chart).

Stocks also came near hitting new lows in relation to yields and earnings. Ever since a few brokers swapped stocks beneath a Manhattan buttonwood tree, the rule-of-thumb way to value a stock was to multiply its profits by ten. Stable earners (like tobacco manufacturers, food companies, utilities, etc.) might be...

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