Greenspan's Silence on Rates Cushions Banks' Fall

volume, lack of news, and a stubbornly bearish market.

"Bank stocks are not really treading water, they are underwater, when you look at them year-to-date," said James M. Schutz, a bank analyst at Stephens Inc. in Little Rock.

At Wednesday's close the Standard & Poor's major regional bank index was down 11.2%, while the S&P 500 index was up 9.3% and the Dow Jones industrial average was up 16.8% year-to-date.

Banks stocks and the market declined sharply in early morning trading after Bank of England unexpectedly raised interest rates. That rattled U.S. bank stock investors who have been worrying that the Federal Reserve would raise interest rates soon.

But bank stocks got a slight boost at 11:45 a.m. after the market learned that Fed Chairman Alan Greenspan had said nothing about stocks, inflation, or interest rates in a speech he gave at Grand Valley State University in Grand Rapids, Mich.

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