Bank technology stocks were mixed last week as economic data suggested no drastic Federal Reserve action to curb inflation but many investors remained cautious.
The Labor Department said 250,000 jobs were added in August, slightly more than expected, but not enough for investors to expect the Fed to hike interest rates during its next policy meeting later this month.
But Wall Street's consensus still is that the Fed will raise rates at some point this year.
"Investors are a little on guard and maybe moving toward more conservative investments," said Beth Marino, economic analyst at Huntington Bancshares in Columbus, Ohio. "I imagine that will be the case until" the Sept. 24 meeting of the Federal Open Market Committee, the Fed's monetary policy arm.
The unemployment rate, which fell to 5.1% from July's 5.4%, "might be of concern to some people," she added, but, "5.1% unemployment in and of itself does not mean inflation is on its way."
F. Mark D'Annolfo, analyst at Adams Harkness & Hill Inc., Boston, said the latest news could have a negative impact on certain bank technology stocks, especially those "selling products to the market." He said there would be less of a "material effect" on bank service providers.
"As a matter of fact, if banks continue to get squeezed, they may want to outsource even more, so it could be a plus," Mr. D'Annolfo said.
The Dow Jones industrial average climbed 52.9 points Friday to close at 5,659.86, up 43.65 for the week. The Nasdaq composite was off 2.08 points from the week-earlier close of 1,141.5.
In other news relating to bank technology companies, National Processing Co. landed a deal with NationsBank Corp. to process retail lockbox payments.
Under the contract, the terms of which were not disclosed, National Processing will handle more than three million monthly payments received by NationsBank Card Services.
National Processing, which is second-largest in the merchant processing part of the credit card business, went public in August, partially spun off by National City Corp.
Smith Barney Inc. analyst L. Keith Mullins recently gave the stock an "outperform" rating and set a 12-month target price of $21 a share, according to a wire report.
National Processing's stock closed at $18.25 Friday, up 12.5 cents for the week.
First Data Corp., continuing its diversification from credit card processing, said it would pay $185 million in cash for Donnelley Marketing Inc., a Chicago-based direct marketing company. Donnelley is owned by DM Holdings, a private investment company in Chicago, and had an alliance arrangement with First Data.
Colleen D'Alessandro, vice president at First Data, said Donnelley's data base, research, and analytical consulting services "brings a platform that helps us fine-tune our own product offerings."
