The dust seems to be settling in the home equity sector after a rash of fourth-quarter earnings reports that investors said were like land mines.

Many companies that hit lows last week have made significant gains since then, in part because the worst seems to be over - for now.

"Quasimodo limped, but he still rang the bells," said UBS Securities analyst Garreth Plank. Now that the feared bad news is out, Mr. Plank said, investors can "sit back and see where they think the value is."

Last week's bombs included Green Tree Financial Corp.'s announcement on Jan. 26 of a $200 million writedown because of restated 1996 earnings; an earnings adjustment by Baton Rouge-based United Cos.; and a Jan. 29 announcement by Money Store Inc. of a charge in its soon-to-be-released fourth-quarter earnings.

But the beleaguered sector showed some signs of life this week.

Green Tree, which was at a 52-week low of $19 on Jan. 28, had risen 21% by Wednesday afternoon to $22.93.

Money Store, Union, N.J., had one of the most significant gains in the sector. The company's stock was trading Wednesday afternoon at $24.93, a 29% gain from Friday's close of $19.3125, as rumors that the company may be bought for up to $35 a share continued to circulate in the investment community.

"You have widows and orphans buying a stock that's at 50% of its high," Mr. Plank said. With the S&P index breaking 1,000, investors are saying, "maybe I can pay four or five times earnings for these companies," he said.

Another big gainer in the past week was First Alliance Corp. Shares of the Irvine, Calif.-based company gained almost 26% in eight days, to $16.375 by midafternoon Wednesday.

Companies that did not have any bad news last week still suffered from Green Tree's news, though they had regained ground by Wednesday, mostly on positive fourth-quarter results.

On Jan 29, Contifinancial Corp., one of the few companies in the industry that has not taken a writedown, announced 21.1% growth in net income for the quarter ended Dec. 31. Its stock price, which had fallen to $16.8125 on Jan. 27, rose 31% by midafternoon Wednesday to $22.0625.

Southern Pacific Funding, Lake Oswego, Ore., posted a 39% increase in net earnings, to $13.9 million, for the fourth quarter, and $53.8 million for the year. Analysts had previously speculated that the company would have to take a charge to cover rising prepayments.

But Southern Pacific's stock did not move significantly on the news. The company traded Wednesday afternoon at $14.50, after trading as low as $11.875 the week before.

Long Beach Financial Corp. of Orange, Calif., announced on Jan. 27 a 162% rise in earnings for 1997, but the company's stock fell to a 52-week low of $9.875 the next day. By Wednesday's close it had risen slightly, to $10.562.

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