Wells Fargo & Co. shares stabilized in Friday trading, but market observers were still scratching their heads over just what investor Warren E. Buffett was doing with his 8% stake in the company.

The consensus view was that he was selling shares.

The share price had plummeted and partly recovered Thursday on a report, which turned out to be in error, that he had sold his entire stake. Wells stock finished the day Friday at $261.19, up $1.19-perhaps helped by speculation in a San Francisco Chronicle column that NationsBank Corp. might buy Wells.

Mr. Buffett's investment company, Berkshire Hathaway Inc., which reported holding no Wells shares at the end of the second quarter, declined to comment on its investment. The bank halted the free fall in its stock by saying Mr. Buffett remains a "substantial" investor, but is now seeking "confidential treatment" for his holding.

Traders and analysts remained convinced that Mr. Buffett placed the stock in the confidential account so he could sell without publicity that might hurt his price.

"There are two reasons why investors seek to make their holding confidential," said Cary Krosinski, vice president at Technimetrics Inc., a New York research firm that tracks Securities and Exchange Commission filings. "They have a proprietary investment methodology or, more commonly, for arbitrage purposes."

If the SEC approves Mr. Buffett's request, he could keep information about what he does with his Wells stock secret for a year.

The last time Mr. Buffett sold Wells shares in May, the bank stock dropped 4.2% and the publicity-shy billionaire investor got some unwanted attention. Traders said Mr. Buffett's application to make his Wells shares confidential could be an attempt to quietly sell his stake, which at last report was 7.82%.

A spokeswoman at Berkshire Hathaway said the firm does not discuss its filings.

Making confidential such a large, high-profile holding is rare and could be difficult for Mr. Buffett to do, said a former high-ranking SEC official.

"I can't imagine what his rationale is," this source said. "If the information's already been filed, he'd need a very good reason to remove it. This doesn't sound right to me."

The source said it would take a minimum of two to four weeks for the SEC to respond to the request. An SEC spokesman said the application was received Aug. 14, and no determination has been made.

Even if the commission rejects the application, it could be appealed, adding several months to the process. In the meantime, Mr. Buffett could have the time to do whatever he wants with his Wells stock.

Mr. Buffett ordinarily documents Berkshire's holdings by using the SEC's 13F form, which is filed by institutional investment managers who do not seek to gain control of companies in which they invest. The form must be filed quarterly.

Investors must file the 13D whenever they change their position by 1% or more. But securities lawyers say this form is designed to weed out investors seeking to gain control of companies, because investors must include their reasons for buying or selling stock. Because Berkshire considers itself a passive investor, it does not file this form.

According to Technimetrics, 25 to 50 of the 1,600 13F forms filed quarterly with the SEC seek confidential treatment.

Although applications for confidentiality are rare, earlier this summer the SEC issued a bulletin telling investors how to apply for confidential treatment.

"People were doing it wrong, so the SEC decided to describe how to do it correctly," said Ronald H. Janis, partner at Pitney, Hardin, Kipp & Szuch.

In Friday trading, bank stocks sank as yields for the 30-year Treasury bond rose to their highest levels in six weeks.

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