Wall Street: Overreacting

This week the U.S. enters what promises to be its sixth straight year of economic expansion, and almost everything is rising—except the stock market. It has been falling since early February, and last week Wall Street's bull was still reluctant. The Dow-Jones industrial average dropped 25 points in three days, touched a 1966 low of 950.66, then rallied fitfully at week's end to close at 953—scarcely higher than last October. Measured by the important price-earnings ratio, stocks are lower than they were at the low point of the 1962 break. They are now selling at an average 16.3 times...