A popular belief is that a war scare sends the stock market up. Last week the New York Stock Exchange proved the old saw false. Exactly the opposite is true. In a study of violent, day-to-day market fluctuations (2% or more change on the Dow-Jones Industrial average) from 1935 to 1955, the exchange reported that in 58 wide swings where war news was a factor 51 were downward. Of the seven advances (between September 1939 and June 1940), all were attributed to the hope that the U.S. would not get into the actual shooting, but that increased foreign arms...
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