A slight rebound in the stock market could not keep investors from sending bank technology shares falling for a second straight week.
The Dow Jones industrial average rose on good economic news as the Labor Department reported the unemployment rate had held steady in October at 5.2%.
The Dow rose 14.9 points last week, closing at 6,020.93. The Nasdaq composite index closed at 1,221.76, dipping 0.84. Goldman, Sachs & Co.'s composite index of U.S.-traded technology companies ended unchanged at 105.7.
The bank technology stocks were victims of investor "overreaction on the negative side" to recent surges in technology stocks, which sent valuations to all-time highs, according to Gary Craft, analyst at Friedman, Billings, Ramsey & Co., Arlington, Va.
One victim of this skittishness was HNC Software Inc. The San Diego neural network specialist, a seller of electronic payments and other financial services software, reported earnings for its most recent quarter of $1.37 million, or 8 cents per share.
Despite meeting Wall Street's earnings expectations, HNC has seen its stock price drop about 35% since mid-October.
"It's just the market we are in," Mr. Craft said. "Investors could not buy enough of HNC during the course of the year, and now, just like many other technology companies that we follow, they can't get rid of it fast enough."
Mr. Craft recently initiated coverage of the company with a "hold" rating.
He also launched coverage of Premenos Technology Corp., whose stock lost nearly half its value last week.
Premenos' share price dropped $8.25, to $8.375, since the company reported operating income of $252,000, or 2 cents per share, for the third quarter. It had a net loss of 20 cents per share after charges related to the acquisition of Prime Factors, a software firm.
Premenos said its 1996 earnings would be below expectations. Analysts surveyed by IBES International Inc. cut their 1996 earnings estimates by 5 cents, to a consensus of 25 cents per share, after the announcement.
Friedman Billings initiated coverage of Premenos with a "buy" recommendation, based on valuations of $5.20 a share in cash and almost "$7 a share in book value," Mr. Craft said.
"This is just a very tough market," he said, "so obviously the stock was severely punished, but our read was, 'all is not lost.'"
Meanwhile, Nova Corp.'s shares have lost 32% since reporting earnings that met estimates.
The unexplained drop led the company to issue a press release, saying it was "unaware of any reason for the unusual trading activity."
Elsewhere, First Virtual Holdings Inc., San Diego, filed an initial public offering statement with the Securities and Exchange Commission. The filing reported that in the last two years First Virtual processed about 208,000 transactions, involving 160,000 consumers and 2,150 merchants.
Although few other details were disclosed, a wire report said the company, which sells software for Internet-based payments, could raise upward of $35 million. Bear, Stearns & Co., Cowens & Co., Lehman Brothers, and Unterberg Harris will lead the offering.