Bear Stearns Cos. and Donaldson, Lufkin & Jenrette Inc. reported big earnings gains Wednesday, joining a procession of banks trumpeting healthy returns this week in investment banking and market-related activities.

Bear Stearns reported a 105% increase in earnings per share for the second quarter, which ended Dec. 31, to $1.64. Record-level underwriting and strong equity markets contributed to the gain. DLJ reported earnings per share of $1.35 in the fourth quarter, up 187% over the year-earlier period.

The investment houses' results followed robust earnings reports on Tuesday from Citicorp, J.P. Morgan & Co., and Bank of America Corp., fueled by capital markets and investment banking. Chase Manhattan Corp. Wednesday reported fourth-quarter earnings of $1.87 per share, up 50%, helped by advances in trading, venture capital, and underwriting. (See related story on page 1.)

After last year's bond market collapse, it was easier to double or triple earnings per share in the fourth quarter, when the Nasdaq composite index was soaring 48% and the Dow Jones industrial average posted a solid 11% gain.

"It was a super quarter for equity trading, underwriting, and M&A," said Michael Flanagan, an analyst at Financial Service Analytics Inc. in Philadelphia.

Fourth-quarter revenues at DLJ rose 66%, to $2.14 billion. Contributing to the gains were fee increases of 80%, to $543 million, and a nearly twentyfold increase in trading-revenue, to $198 million.

Likewise, Bear Stearns reported revenue gains of 31%, to $2.54 billion, with the largest increases coming from mergers and acquisitions, up 45%, to $606 million, and investment banking, up 66%, to $273 million. Bear Stearns' expenses grew slower than revenues, with noninterest expenses rising 27%, to $1.04 billion. Through buybacks, Bear Stearns' shares outstanding declined 3%, helping the company to more than double its earnings per share.

For the most part on Wednesday, as the American Banker index fell 0.9% to 622.4, stock of DLJ Wednesday fell $1, or 2%, to $48.75. But Bear Stearns' rose $1, or 2.4%, to $43. Meanwhile, stock of Morgan Stanley Dean Witter rose $1.9375, or 1.5%, to $135.6875; Goldman Sachs Group Inc., 68.75 cents, or 0.8%, to $87.5625; Merrill Lynch & Co., 37.5 cents, or 0.5%, to $79.9375; and Lehman Brothers Inc. 25 cents, or 0.3%, to $76.50.

But with last year's debacle fresh in their minds, analysts' optimism was tempered.

"There is question of how much better things can get," Mr. Flanagan said. "There is little left - short of a downtick in interest rates - that could help to boost results further."

"Profit margins are high, but we continue to be plagued with an element of volatility with the investment banks," Mr. Flanagan added.

That said, investment banks will make gains this quarter from an increase in revenues in bond underwriting, which had slowed to a crawl in the fourth quarter as a result of year-2000 compliance concerns.

Also, Mr. Flanagan said, most major investment banks are pouring resources into expansion abroad, now one of the biggest growth sources.

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