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Show - yi H,m Major Banks Raise Prime Lending Rates to 12 K gait fake tribune By James F. Peltz Associated Press Writer Major banks nationwide raised their prime lending rates percentage point to percent Thursday, the second increase in the key borrowing rate in three weeks. The move lifted the banks prime, or base, lending charge to its highest level since October 1982, when it also was 12 percent. But some economists said they did not expect the rate to climb again in the next few weeks, and for interest rates overall to staby Business Friday Morning April one-ha- lf 12 6, 1984 bilize. Section B First National Bank of Chica Page 13 go, the nation's eighth-largecommercial bank by deposits, led the latest round of prime-rat- e increases. It quickly was followed by second-rankeCitibank and No. 3 Chase Manhattan Bank in New York, and later by industry leader Bank of America in San Francisco. d While the increase had been anticipated on Wall Street, stock prices nonetheless fell to their lowest level in nearly a year, with losers outpacing gainers by more than 3 to 1 on the New York Stock Exchange. The Dow Jones average of 30 industrial stocks tumbled 18.01 points to 1,130.55, its lowest close since it stood at 1,124 71 last April 8. The big banks had just raised their prime rates to 11.5 percent from 11 percent on March 19. But credit analysts said the latest increase was warranted given economic conditions. The prime rate is a lagging indicator, in that it usually follows changes in other interest rates. Since rates in general have continued to edge higher in recent weeks, they raised the banks cost of obtaining funds for lending. For example, the federal funds - April 5, N.Y.S E. S. & P. 1 (non-unio- cent, says Patj Alibrandi, dent of the 89.33- - 1.38 Index 155.04-2.5- Comp. Dow Jones Ind. 0 1,130.55- - 18.01 V presi-l- f Asso-l- u t Builders!R ciated and Contractors. The ABC cludes in- 17,000-memb- contrac- tors nationwide. The unions' A simply priced. Work Begins on Rail Facility Construction has startrail maintenance and SPRINGVILLE ed on $15-milli- repair facility for Intermountain Power Project, $5.8-billio- n, Lynn- - dyl, Millard County. IPP starts first coal-fire- d electrical generation unit in 1986. Architects drawing above shows facility is planned east of Interstate 15, top left. Mr- - Woody themselves out of competition, he says. And if they wish to survive, they would do well to consider the implication of their Restore and More rhetoric as they approach negotiations on contracts this year, he said. If they take the same tack as the auto unions now asking for restoration of concessions, and wage and benefit increases the construction unions may well lock themselves out of jobs, he says. And that would be sad, since the nation is better served by a dual enn constructity of union and tion, he said. Merit shop contracting, which began in the Southeast in the early 1970s, has its biggest gan in the past five years, he says. Builders and developers, out of fear of being shut down, had been consenting to wage increases of 14 to 18 percent in 1979 and up to 80 and in some cases 100 percent by 1980, he says. The end user who determines who gets the work decided union construction was much too costly. They tried open shop and they liked non-unio- Late Easter, Bad Weather Slow Sales et 984 central banks stance also has prevented a substantial decline in interest rates. However, some economists now expect the economys growth to slow in the second quarter, and for the Federal Reserve to avoid a further tightening of credit. By Robert H. Woody Tribune Business Editor Ten years ago, 15 percent of the nations construction dollars went to merit shop contractors. Today its 70 per- - Wednesday. Many banks across the country New York Stock Exchange York. At the same time, the Federal Reserve has tried to restrict the availability of credit to prevent the economy from overheating and fueling inflation. But the Committing Price Suicide NEW YORK (AP) An afternoon selloff sent the stock market tumbling to its lowest level in almost a year Thursday as the specter of rising interest rates continued to haunt Wall Street. Auto, transportation and retailing issues showed some of the biggest declines in a busy session. The Dow Jones average of 30 industrials tumbled 18.01 to 1,130.55, its lowest close since it stood at 1,124.71 last April 8. Over the last six trading days, the average has fallen 44.07 points. Volume on the New York Stock Exchange reached 101.75 million shares, up from 92.86 million The Market In Brief Jen-rett- s U. S. Construction Unions Tumbling open-mark- climbed to nearly 11 percent from 10 percent on March 19 and 9 5 percent at the start of the year. Also, as economic growth has continued robust, so too has demand for loans. That rising demand, together with the massive credit demands of the federal government, is putting further upward pressure on interest rates. Loan demand has definitely picked up in the last six weeks, as the economy expands, business develops a need for external fi nancing," said Elliott Platt, an economist at the investment firm Donaldson, Lufkin & e Securities Corp. in New Up and Down Street Selloff Sends Stocks raised their prime lending rates Thursday from IIV2 to 12 percent. It was the second half-poiincrease in three weeks in the nominal rate banks set for their biggest and best customers. In addition, there was widespread speculation that the Federal Reserve would soon raise the discount rate, the charge it imposes on loans to private financial institutions. Money Rates Analysts noted that the prime rate increase came in response to monthe recent rise of ey rates, and had been widely anticipated. But they said investors apparently were fearful of still higher rates to come, and the chance that expensive credit would disrupt the expansion of economic activity. Those concerns were evident in the performance of stocks like the autos, airlines and retailers, whose See Page Column 2 rate, the interest on overnight loans between banks, has By The Associated Press Major U.S. retailers reported on Thursday mixed sales results in March, compared with a year ago, blaming a late Easter and miserable weather in many parts of the nation. Easter fell on April 2 last year, with sales of spring finery showing up in the March sales results. This year Easter is much later, April 22, and those results wont show up until next month. Only one week in March had favorable weather, noted Edward R. Telling, chairman of Chicago-base- d Sears, Roebuck & Co. He said sales for the industry leader during that week were 10 percent over a year ago, but for the month, its sales grew only 2.4 percent. For the first nine weeks of the retailing fiscal year, Sears said sales were up 5.4 percent over last year, when the recovery was well underway and sales at most stores were brisk. Of the top eight retailers, all posted March increases, albeit modest, except for No. 2 K mart Corp., based in Troy, Mich., which said sales declined 0.2 percent, and New York-base- d Woolworth Co., No. 7, which had a 0.4 percent decline. Jeffrey Edelman, first vice presi- dent of Dean Witter Reynolds Inc. and a Wall Street retail analyst, agreed that the comparison with the year earlier was distorted, but was unwilling to speculate how much of the overall showing was influenced by the weather vs. the calendar. He said, Well have to wait it out until next month to see if theres been a disruption in the consumer momentum that has been credited with pulling the economy out of re cession, through recovery and into expansion. Sears said sales in the five weeks ended March 31 were $2.16 billion compared to $2.11 billion a year ago. For the sales were $3.78 billion, up from $3.59 billion. year-to-dat- K $1,548 e, mart said sales were off to billion from $1.55 billion. For the year, sales were $2.65 billion, up from $2.54 billion, a gain of 4.3 percent. Oscar Nominees Insured by Fireman9 s picture have sustained any major Special to The Tribune NOVATO, Calif. Firemans Fund Insurance Co. has good reason to feel all five of the movies nominated for an Oscar as best picture of the year are winners. Thats because the company, one of the largest entertainment industry insurers in the world, insured them during production. Patrick OFlynn, senior vice president in charge of specialty lines for the insurer, noted that not one of the films nominated for best losses. Mr. OFlynn said an unusual claim was paid to the producers of The Right Stuff, however. A mock space capsule sank during filming, resulting in a claim fcr damage to the prop and a delay in production time. films on Other which Firemans Fund wrote insurance included The Big Chill, Tender Mercies The Dresser, and Terms of Endearment. Oscar-nominat- terstate Electrical Services Corp., Burlington, Mass, largest electrical : ; contracting firm in New England. He was in Salt Lake City Thursday to address the Utah Chapter of the ABC. The nation is looking to a infrastructure roads, bridges and ancillary buildings renewal construction program, he notes. The ABC believes one trillion dollars could be cut if thd federal government would rationalize Davis-Baco- n Act requirements for paying prevailing wages on federally-funde- d projects. Davis-Baco- n alrequirements now new modified by though regulation have long inflicted high construction costs on the nation, he said, since prevailing wages" are typically measured against the highest wage in a region and in some cases are artifically inflated. Consider California, he said, where recent prevailing wages are upward of $36 an hour for sheet metal and asbestos workers. Lack of mobility in the construe- tion industry e.g., you cant export construction as you can cars has protected U. S. industry from the in- roads that have impacted the steel, auto and electronics industries. But more than anything, the merit shop phenomenon as well as reces- sion and the resistance to escalating construction costs, has restored economy to the the building industry, he said. it. The big cities, he said, for some time remained for enclaves of union construction. But in the past two years, merit shop contractors have made major inroads in such as Atlanta, Los Angeles and Detroit. Mr. Alibrandi is president of In '. ; " . -- Completed buildings now are fre- quently coming in under engineers -estimates. With decline of the union presence and its four-yea- r apprentice train- ing progams, the ABC has intro- - 5 duced its own modular training pro- grams which enable entry workers t to reach proficiency at certain lev- - 7 e g. rough carpentry els in as little as two and a half years. 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