Since the start of the Korean war, the stock market has become trigger-sensitive to news from Washington. Last week the market was so ticklish that it reacted to news before traders knew what the news was. In the two days following the Fourth of July holiday, the Dow-Jones industrial average had chalked up a tidy rise of 2.5 points to 210.85. But shortly after 1 o'clock on Friday afternoon, the news tickers in brokerage offices flashed a cryptic message from Washington: the President would make an important announcement at 3 o'clock (i.e., after the market had closed).
Because of the...
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