Most bank technology stocks drifted lower again last week, although shares of technology outsourcing firms rose after General Motors Corp. said it planned to spin off its Electronic Data Systems subsidiary.
The prices of most publicly held financial technology companies' stock prices followed the overall market downward, as investors fretted that the six-month bull market running rampant until last month was finally losing momentum.
Shares of Dallas-based EDS bucked the trend, however, as investors were bouyed by GM's much-anticipated move to spin off the computer services giant.
Under the plan, EDS shareholders - who now own a separate class of GM stock giving them rights to the subsidiary's dividend stream - will get new shares of capital stock that represents true ownership in the company.
Wall Street analysts said the deal will allow EDS to grow faster through acquisitions, because the existing stock arrangement made it nearly impossible to use its shares as currency. For example, EDS' recent deal to acquire management consulting firm A.T. Kearney Inc. had to be done mostly in cash.
"As an independent company, EDS could accelerate its growth through acquisitions," said CS First Boston analyst David Togut.
Mr. Togut added that he raised his 12-month price target for the new EDS shares to $60 from $52 for the current GM Class E shares.
EDS shares closed Friday at $46.25 each, up $2.875 for the week.
Bank software provider SEI Corp. announced last week it has contracted with Niit USA Inc. to help in the development of SEI's next generation of trust accounting software.
Niit USA, a subsidiary India-based Niit Ltd., will aid in the development of SEI's Trust 3000 Open Architecture Platform, in which mainframe-based computing will be augmented by client/server systems.
The new technology effort will enable SEI to develop new software applications faster and provide links to a variety of third-party software providers, company officials said.
Niit was selected to build an "application programming interface" supporting a library of over 750 business transactions.
Officials added that the first software system that will take advantage of this new programming interface will be a third-party "custody workstation," a Microsoft Windows-based application used by a bank's institutional trust customers.
Wayne, Pa.-based SEI's common stock closed at $22.125 per share Friday, up 50 cents for the week.
Hardware maker Verifone Inc. said last week is has formed a nonexclusive alliance with MasterCard International to promote a variety of electronic payment systems.
Company officials said the alliance focused on four areas: debit cards, tests of computer chip-embedded "smart cards," so-called electronic purse products, and cardholder loyalty programs.
The two companies plan to set up specific programs on a region-by-region basis as part of a worldwide strategy for expanding credit, debit, and smart card payment systems.
Redwood City, Calif.-based Verifone's common shares closed Friday at $26.625 each, down 50 cents for the week.
