Chase Manhattan Corp. shares plunged 5.2% Thursday as a result of rumors that its third-quarter earnings would fall short of projections and that the bank would report them early.

The rumor was that Carla D'Arista, an analyst with Friedman, Billings Ramsey & Co., had lowered her earnings estimate for the company to $1.25 a share, from $1.31, after a meeting with Chase executives.

Ms. D'Arista denied she had made any change, according to an associate. Nevertheless, he said, a lower earnings projection may materialize. "But people definitely got ahead of themselves," the associate said.

A Chase spokesman said Thursday that the banking company planned no such announcement, and that it never comments on earnings projections.

Still, the stock failed to recover fully from its earlier losses. At one point in the day, it was down nearly 6%.

The rumor picked up steam after it was reported on CNBC.

Analysts said the incident highlights the skittishness of the market for financial stocks. Analysts attributed the nervousness of the market to fears about interest rate increases, which tend to hurt bank stocks, and recent negative earnings projections by two leading banks, Bank One Corp. and First Union Corp. Like Chase, both had been among Wall Street's favorites.

"It's just amazing," said one trader who watched Chase shares decline throughout the day. "It takes so little."

Phil Cuthbertson, head trader with Keefe, Bruyette & Woods, said, "This highlights how nervous the market for financials is."

The consensus estimate for Chase' third-quarter earnings as reported by First Call, was $1.35. Regardless of whether the rumor was true, "A nickel for Chase isn't much," Mr. Cuthbertson said. "It shouldn't take the stock down $5."

Chase is coming off a solid second quarter, when revenues rose on increased trading revenues, strong fee income and brisk consumer business. The company has so far said nothing about how third-quarter results are shaping up.

Ms. D'Arista was at a stock analysts' conference on Thursday and spent much of her time running back and forth to the phone, trying to persuade investors to put the brakes on selling.

Exacerbating the rumors, traders said, was a report by Merrill Lynch Global Securities early Thursday afternoon that said the bank was comfortable with Merrill's estimate of $1.29 a share for the quarter, substantially lower than analysts' consensus of $1.35.

Merrill later retracted the report after talking to Chase Manhattan, the traders said.

Investors have become trigger-happy,'' said Marc Davis, research director with the Banc Stock Group, Columbus, Ohio.

"There are so many buyers and seller sitting in the wings. Today the sellers swooped down."

Mr. Davis said he was not taken in by the rumors.

"I thought, 'This is ridiculous,' " he said. "We're buying some."

But other observers give credibility to the tone of the rumor.

Chase is part of a group of large banks that will show earnings disappointments, said Michael Mayo, a banking analyst with Credit Suisse First Boston. "This is just window dressing for what's going to happen at multinational banks" in coming quarters.

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