Bank technology stocks nosedived last week as investors searched for safe havens amid unfavorable corporate earnings reports and anticipation of a Federal Reserve rate hike.
"The entire technology sector is very weak," said Gregory M. Gould, an analyst for Goldman Sachs & Co., New York.
"In general you are seeing the higher multiple stocks come under more pressure than the lower multiple stocks," he added.
The Nasdaq composite index, which lists some of the most prominent technology stocks, was down 146 points late Friday. The index has lost more than 11% since setting a record high of 1249.15 in early June.
The Dow Jones industrial average dipped 55 points for the week.
Among the companies that provide services to banks, Cybercash Inc., Reston, Va., has been one of the hardest hit by the downturn. The provider of electronic commerce software saw its stock plunge $12.00 to $35.75 last week on no discernable news.
John F. Powers, an analyst at San Francisco-based Robertson Stevens & Co., said the stock market has grown skeptical of "concept" companies with promising futures but meager near-term earnings prospects. He said Cybercash only recently has begun "to generate tiny bits of revenues."
The stock of Transaction Systems Architects Inc. of Omaha, Neb., also had a tough week. Shares of the electronic funds transfer software maker were trading at $30.50 late Friday, down $6.125 for the week.
Mr. Gould attributed the drop to the company's high price to earnings multiple.
Also dipping were the shares of Security First Network Bank. Based in Pineville, Ky., the Internet-based bank made a successful initial public offering in May, but its shares have since lost more than 40% of their value.
Shares were trading at $24.75 Friday, down from a high of $41.50 last month.
Not all bank technology companies fell victim to the markets' downturn.
For example, the stocks of bank outsourcers fared relatively well. Experts said this stability is a function of the consistent revenue delivered by long-term contracts in this business.
Elsewhere, Transaction Network Services also avoided the battering taken by other stocks.
Shares of the Herndon, Va.-based transaction processor were down only $1.75 on second quarter income figures of $1,473,000. The company's results, a 36% improvement over the year-earlier period, met Wall Street's consensus estimate of 12 cents per share.
Total System Services Inc. also reported second quarter earnings.
The Columbus, Ga.-based card processor said net income for the second quarter rose 31.4% over the year earlier period, to $7.9 million. Earnings per share figures of six cents for the quarter met Wall Street's expectations.
"Internal growth of cardholder accounts from existing customers remained strong in the second quarter," said Richard W. Ussery, chairman and chief executive officer of Total System, which is a unit of Synovus Financial Corp.
Jeremy Quittner contributed to this story.