Bank stocks fell Wednesday as investors became a bit nervous in anticipation of the government's planned release of November employment data on Friday.

There was no panic or massive dumping of financial company shares, but bank stocks dipped while the broader markets rose modestly.

The fear is that the employment report, to be released by the Labor Department, might show a higher-than-expected increase. Economists say that could prompt the Federal Reserve Open Market Committee, the central bank's rate-setting arm, to raise interest rates at its next meeting, on Dec. 21. The Fed already has raised interest rates three times this year. Its most recent move came at its November meeting.

"The market is jittery that the employment report will be stronger than anticipated," said Sung Won Sohn, chief economist of Wells Fargo & Co. in San Francisco. If the figures are too strong, it would be a "psychological shock to the market, and investors would start thinking that the Fed is going to raise interest rates at its December meeting, instead of at its February meeting."

The American Banker index of 50 banks fell 0.2% and the American Banker index of 225 banks 0.23%. However, the Dow Jones industrial average gained 1.11% and the Standard & Poor's 500 index 0.62%.

Among the biggest losers were Chicago-based Northern Trust Corp., down $1.3125, or 1.36%, to $95.50; Cincinnati-based Fifth Third Bancorp $2.25, or 3.21%, to $67.75; and Memphis-based First Tennessee National Corp. $1.0625, or 3.23%, to $31.40625.

Investors have become so concerned about the employment report that they are dismissing other government reports that indicate inflation is in check.

On Wednesday investors ignored the National Association of Purchasing Management index, which fell to a lower-than-expected 56.2 in November, from 56.6, and the Conference Board index of leading economic indicators, which was unchanged.

Two components in the employment report that investors are worried about are average hourly earnings and the unemployment rate, Mr. Sohn said.

Some economists say the unemployment rate might fall below 4%, and if it does, it could be interpreted by the markets that greater inflation lies ahead. And greater inflation leads to higher interest rates, Mr. Sohn said.

"The employment data has been the most important indicator to watch," Mr. Sohn said. "I do not believe the Fed is going to raise interest rates in December, but the market has been sitting on pins and needles thinking that it will."

Though concerns about higher interest rates continue to bedevil the market, worries about a possible disaster as a result of year-2000 computer problems have dissipated, market experts said.

"Y2K is just not a primary concern right now with investors," said Mr. Sohn. "They have decided that institutions in America will be ready to tackle Y2K, and that there will not be any major disasters."

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