The performance of big-bank stocks, undermined by willy-nilly investors in a climate of rising interest rates, gives credence to the much-forgotten adage: Buy and hold.

While the Street's talk focuses on the beating bank stocks have been taking under a persistent threat of rising interest rates, the largest banks have held their own over time.

The Standard & Poor's bank stock index -- a sampling of 31 regional banks and money-centers -- closed up 1.65 points Wednesday, or 0.3%, at 624.24. That is down from its 1999 high of 729.04 on April 27, and its all-time high of 788.95 in July 1998, before last year's market turmoil.

But compared with three years ago, the group is still up 242 points, or 63%. Though that number lags the robust 102% growth of the Standard & Poor's 500 index over the same period, big banks have trounced the index during the 1990s.

"It is hard to be a long-term investor in these markets when company fundamentals don't impact the stock price," said Scott Edgar, an analyst for the $1.1-billion-asset Sife Trust Fund of Walnut Creek, Calif. "You have to step back and look at three-year and five-year time horizons to see where the trends are."

Indeed, the decade has been very kind to U.S. bank shareholders, says Diane L. Merdian, an analyst at Bank of America Securities. Starting in 1990, $100 spent on a mix of stocks of the top 50 banks would be worth more than $600 by 1999, compared with about $300 for the S&P 500.

"Investors judge banks to have taken undue risk" with credit quality or integration of acquisitions, Ms. Merdian wrote in a report. As a result, the S&P bank index trailed the S&P 500 by 20 points last year. But 1998 along with 1987 and 1990 -- was one of three "really bad years for banks in the last two decades."

But as with the last rising interest rate environment, in 1994, bank stocks took the most severe punishment. In that year and early 1995, the Federal Reserve raised the federal funds rate the rate of interest banks charge each other for overnight loans by 300 basis points. During that period the S&P bank stock index fell 13%, while the S&P 500 fell 3.3%.

Similarly, since jitters over interest rate hikes this year took hold in May, the S&P bank stocks have fallen 13%, while the S&P 500 fell 1.1%.

"No matter what you say, everyone beats the same horse about how banks don't necessarily make as much in a rising interest rate environment," Mr. Edgar said. "But bank stocks and interest rates move in opposite directions. It's just reality. Whether it is logical or not for these stocks to trade that way we can debate quite a bit."

Analysts like Mr. Edgar argue that banks are better hedged these days against interest rate fluctuations. Banks now have a variety of tools, such as derivatives, to reduce or eliminate balance sheet risks.

"The direction of interest rates affects the stocks in the short run," Mr. Edgar said. "But then ultimately it is the fundamentals that give direction to stock performance. Even in rising interest rate environments, your numbers should remain intact."

Indeed, even in the short term, investors' squeamishness over potential interest rate increases are no match for flubs in fundamentals.

When Bank One Corp. announced on Aug. 24 that it would fall short 7% to 8% in its earnings this year, its stock dropped 23% the next day and has floundered ever since.

In Wednesday trading, bank stocks closed down on light volume. The only significant news for investors to digest was a Conference Board index of leading economic indicators, which rose 0.3% in July, the same amount as June, and a decline in construction. The two items more or less cancelled each other out.

Bank of America Corp. was down 18.75 cents, or 0.3%, to $59.8125; Chase Manhattan Bank down 96.875 cents, or 1.2%, to $82.71875. Big-name winners included Wells Fargo & Co., up 81.25 cents, or 2%, to $40.625; First Union Corp., up 68.75 cents, or 1.7%, to $42.1875; PNC Bank Corp., up $1.1875, or 2.3%, to $53.50; and Southtrust Corp., up $1.1875, or 3.4%, to $36.50

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