Bank stocks staggered to their feet Tuesday but still face an uncertain market.

The Standard & Poor's bank index surged 4.19%, recouping about half of Monday's decline.

The Nasdaq bank index edged 1.31% higher, and the S&P 500 climbed 5.12%.

Some bank stock investors clearly saw a buying opportunity after Monday's plunge, but others remained worried about the roiling stock markets overseas.

"There is a huge element of risk for banks now that didn't exist several weeks ago," said Richard X. Bove, a banking analyst at Raymond James & Associates.

Regional banks made strong comebacks. CoreStates Financial Corp. regained $6.0625, to $73.9375; State Street Corp. shares rose $3.50, to $59.3125; and National City Corp. gained $3.1875, to $59.3125.

Banks with substantial exposures to the troubled Southeast Asia markets also recouped some of Monday's lost ground. Citicorp rose $4.1875, to $127.50. BankAmerica Corp. shares rose $6.0625, to $74. And Chase Manhattan Corp. was up $2.875, to $119.8125.

Despite the strong rise in the market, many investors remained anxious.

"We have seen some buyers and investors who are covering" short positions by buying shares, said Andy Vissicchio, who trades bank shares for UBS Securities. "But the general sense in the market is that this is not the bottom. We probably won't see another 500-point drop, but we will see stocks move in lockstep in either direction."

Eric Jacobs and Jeffrey Miller, who manage the Acadia fund, a financial hedge fund, foresee another downdraft simply because banks and the rest of the market remain overvalued.

"These banks should not be trading where they are at," said Mr. Miller. The good thing about the downdraft "is that it has people thinking that these valuations cannot go up forever. Should there be another decline to get fair value? Yes!"

Another hedge fund manager acknowledged that he was still antsy.

"In general, financials are still the most stable, with better earnings, but I don't think we have seen the lows," said the manager, who declined to be named. "Obviously I am concerned about deflation overseas."

Mr. Bove of Raymond James said American bank stock investors have very good reason to worry.

"What happened (on Monday) is not some kind of fluke in the financial markets," he said. "It is the result of decades of investment and financial policies, and therefore it just won't evaporate tomorrow."

One notable concern, said the analyst, is that Southeast Asia countries and banks may not be able to repay loans extended to them by U.S. banks.

"If we get an increase in loan losses, that reduces capital and capital is necessary to leverage more new loans. Therefore you are lowering the loan growth rate" of many of the larger U.S. banks.

Another problem-which explains why regionals took a dive on Monday-is that banks that have derivatives positions are also hurt because they are so dependent on the status of overseas currencies, Mr. Bove said.

Scott Edgar, bank analyst at the SIFE fund, which is invested predominantly in banks and financial companies, said he believes Monday's downturn hurt regional bank investors' prospects of making a killing on mergers. The devaluation of the stock, he said, pushes any merger and acquisition activity further down the calendar.

"The acquirers' stock doesn't have the currency value that it had before, meaning that it is difficult to make an acquisition without being dilutive."

Thomas Carpenter, chief economist of ASB Capital Management, said, "The overall growth rate of the American economy is destined to slow because of what is happening overseas, and because of that loan volumes for banks will be much less."

"There is going to be a good amount of credit losses to charge off that will emanate from the Pacific Basin."

One positive in this, however, is a possible decline in interest rates, said the veteran economist.

"It would inappropriate for the Federal Reserve to raise interest rates this November," said Mr. Carpenter. "They are unjustifiably and inexplicably high when viewed against this nonexistent-inflationary backdrop."

Nevertheless, Mr. Edgar is optimistic. "We were not selling Monday, but we are looking more closely at buying," he said Tuesday.

David H. Ellison, portfolio manager of two bank mutual funds for Friedman Billings & Ramsey & Co. in Boston also saw bargains in Tuesday's market.

"I'm using this opportunity to buy names that I like," said Mr. Ellison. "In fact, I was disappointed that the market did not go lower, I was hoping to buy things cheaper."

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