Stock Prices Sink Sharply; Pace of Trading Still Slow
NEW YORK, April 5 ÛÓThe stock market, burdened by another rise in banksÛª prime lending rates, sank heavily today in continued sluggish trading.</br></br>The Dow. Jones average of 30 industrial blue chips dropped 11.35 to 847.54, while losers outnumbered gainers by more than 3 to 1 on the New York Stock Exchange.</br></br>NYSEÛªs broad-based index, encompassing all its listed common stocks, fell 0,07 to 49.55, its lowest close since Feb. 20. Standard & PoorÛªs 500-stock index lost 1.32 to 93.01.</br></br>Brokers agreed the main catalyst in the decline was an increase in the prime rate from 9.5 to 9.75 per cent, posted as the market opened by New YorkÛªs First National City Bank and quickly duplicated at many other banks across the country during the day.</br></br>Stock prices generally retreat in the face of a rising prime because it means higher costs for corporate expansion and everything else in business that requires borrowing of funds.