investors to ask, "When will it end?"

Most say the decline is likely to continue into next year.

"We wouldn't expect much letup until early next year," said David Trone, a bank analyst at Credit Suisse First Boston. "Right now there's building concern about the sustainability of earnings, and once you get into November and December people will shed bank stocks because of Y2K fears."

Until banks produce good earnings numbers, there is little to stop the selling, said William Channel, a banking analyst with Stephens Inc. of Little Rock.

"If we see another solid quarter of strong earnings growth," he said, "the banking sector as a whole would become more attractive on a relative basis. You've got credit- quality concerns combined with a fear of higher interest rates."

Kevin Timmons, an analyst at First Albany Corp., said, "It's very difficult to call a bottom to this." He said that just about every day, "something creates concern about the sector."

Virtually all bank stocks were down on Tuesday. At Stifel Nicolaus & Co. in St. Louis, research director Joseph Stieven's computer has a green screen, and all bank stocks were flashing red, meaning they were down.

"My screen looks like a Christmas tree," he said.

The apparent reason for the latest rout was the government's report that August retail sales were robust. They posted the largest gain in six months as people increased their purchases of a wide range of goods, from cars to clothing.

August sales were up 1.2%, to $252.390 billion, after increasing a revised 1% in July. The August sales report showed the largest gain since February, when it was 1.7%.

Continuing gains in retail sales could give the Federal Reserve greater reason to raise interest rates another notch at the October meeting of the Federal Open Market Committee, which sets the nation's interest rate policy. The Fed has said it would act preemptively to forestall inflation.

"It's another selloff," said Erika Hill, a banking analyst with Pacific Crest Securities of Portland, Ore. "You're seeing stocks react to government figures."

If the retail figures were not enough, investors also may have been reacting to a dour "Heard on the Street" column in The Wall Street Journal. The article warned about credit quality and paper losses in the banks' securities portfolios.

Adding to the market's anxieties is the scheduled release today of the consumer price index. Analysts said that if it is stronger than the markets expect, bank stocks could be hurt yet again.

Not everyone was dumping their bank stocks for good. "We're staying in the banking group, but we're being prudent," Mr. Stieven said. "It's a time to take some profits and then redeploy capital selectively into the bank group."

Bank stocks lagged the rest of the market. The Standard & Poor's bank index lost 2.63%, and the Nasdaq bank index 1.27%. The Dow Jones industrial average fell 1.09%; that's on top of a 0.6% decline Monday.

Among individual stocks, Bank of America Corp. dropped $2.6875, or 4.54%, to $56.50; Chase Manhattan Corp. 31.25 cents, or 0.4%, to $77.375; and J.P. Morgan & Co. $2.8125, or 2.25%, to $122.

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