Business: Rout in Bonds

Sears, Roebuck & Co. last week announced plans to sell a $350 million bond issue, the largest industrial bond offering in U.S. history. But before signing a contract with its underwriters, Sears said it wanted to take a careful look at conditions in the bond market. What particularly alarmed Sears and other prospective corporate-bond issuers was the situation in U.S. bonds. After a year-long rise, Government bonds were going through the fastest, worst shakedown in postwar history, causing dealers to employ such expressions as ''chaos," "rout" and "panic."

Although corporate bonds were holding up much better than Governments (see chart), the sharp...