Bank technology stocks rode the bull market last week, especially after Friday's Labor Department jobs report.

The uptick in July's unemployment rate encouraged investors to believe the Federal Reserve will not raise interest rates later this month.

The 193,000 new jobs were fewer than Wall Street analysts expected. The Dow Jones industrial average flourished on the news, gaining 206.4 points for the week to close at 5,679.46.

The Nasdaq composite, recovering from its recent downturn, closed at 1,124.9 Friday, up 45.46 points for the week.

Anticipation of the jobs report, along with earlier economic indicators, also fueled a weeklong rally in the bond market. The Treasury's benchmark 30-year issue rose to Friday to 90.78, lowering the yield to 6.74% from the prior week's 7.01%.

In recent weeks there had been a "divergence between the stock and bond market, so it's nice to see the two getting back in step," said Richard Weingarten, an analyst at Montgomery Securities Inc., San Francisco.

"It certainly is a positive scene," he added, referring to the performance of bank technology stocks - card processing companies in particular.

The transaction processors are active in a rapidly changing payment system, he said, which should bode well given opportunities in debit, procurement, and stored-value cards, and government-sponsored electronic benefits transfer systems.

"I think the growth rate for payment processing companies can continue at very high levels for many years to come," Mr. Weingarten said.

Prominent among the financial-related service companies was Affiliated Computer Services Inc. of Dallas. Its share price rose $5.75 last week to $56, following better-than-expected quarterly earnings. Net income for the Dallas-based outsourcing firm rose 43%, to $7.3 million.

Darwin Deason, the company's chairman and chief executive, said it has "accomplished great things in 1996," including several new processing contracts and an aggressive acquisition program.

The company raised $170 million through two secondary public offerings, which helped it acquire eight companies this year.

Banctec Inc., also of Dallas, signed a marketing deal with Tandem Computers Inc.

Cupertino, Calif.-based Tandem will market Banctec's item processing software and hardware in China, where the government wants to build a national network supporting 300 million smart card and automated teller machine users by 2003.

Banctec's stock was up 50 cents for the week, closing at $20.875.

Elsewhere, Fiserv Inc. said Norwest Corp. signed a five-year contract to have it process some 150 million items a year from the bank's Milwaukee and Chicago regions. Fiserv's shares were up $2.75 for the week, to $35.375.

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