Most bank stocks drifted aimlessly Tuesday, untouched by a bond market rally that helped other stocks in pre-holiday trading.

"There's no discernible trend today," said Denis LaPlante, a banking analyst at Fox-Pitt Kelton Inc., New York.

By midafternoon, the Standard & Poors bank index was up barely 0.14%, despite a credit market updraft that boosted the 30-year bond 15/32 to 97 11/32, yielding 6.96%.

Bonds were ruffled only briefly by news that the Conference Board's consumer confidence index for August rose 2.4 points to 109.4, suggesting a healthy economy.

"It's a bit disconcerting to see bonds enjoy a little bounce today, and the banks stocks not bounce," said Lawrence W. Cohn, banking analyst at PaineWebber Inc.

"Without making too much of one day in the last week of August, it probably has to do with how strong bank stocks have been," he said. "These stocks had such a substantial run this summer that it's probably time for a pause, at best."

The rally was partly induced by the Federal Reserve's holding pattern on interest rates. Investors expected a rate increase in July or August, but the central bank elected to pass.

"Everyone was braced for bad news, and it never came. So the stocks rebounded," Mr. Cohn said. "In addition, earnings in many other sectors of the economy have been weak, while bank earnings have held up.

"As money has been pushed out of technology stocks and other hot areas, portfolio managers have had to invest elsewhere, and they responded by moving into financials," the analyst noted.

But Mr. Cohn, who has been bearish on bank stocks for well over a year, still sees ample reason for caution.

"If you look more closely, you see that the best-performing banks have been the largest capitalization stocks, suggesting that a lot of money is just parked," he said. "It is not at all clear how much conviction lies behind this money."

The PaineWebber analyst, admitting he has been wrong so far this year, still believes weaker earnings momentum will hurt bank stocks.

Nonrecurring gains have bolstered earnings while fundamental results have slowed down, he said.

"The market hasn't seemed to care about this," Mr. Cohn said. "But at some point, it will care."

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