STATE OF BUSINESS: Higher & Higher

The surging bull market paused briefly last week to catch its breath, then leaped to new highs. The Dow-Jones industrial average climbed to 389.60 at week's end, up almost two points from the week before. Said one Wall Streeter: "It used to be that the market rose in expectation of good business. Now it's rising because good business is here." Among recent signs of a vigorous economy:

¶ Auto production for the week reached 140,627, the highest point for any week in 18 months. Sales matched the production pace, e.g., Ford sold 60% of dealer stocks the first day that new models were displayed; General Motors said that its dealers were selling cars as fast as the factories roll them off the assembly lines.

¶ Steel production rose to 80.5% of capacity for the first time in a year and some steelmakers found orders were coming in faster than they were going out. Some temporary shortages cropped up for cold-rolled sheets, basic stock of the auto industry. The C.I.O. United Steelworkers Union happily reported that 18% of its 227,000 jobless members had gone back to work in the past 3½ months.