Unexpectedly strong economic data on Friday fanned fears that interest rates may rise quickly, placing new pressure on bank earnings.

News of much-faster-than-anticipated job creation in both March and April sent financial markets into a swoon and bank stocks into a tailspin.

Money-Centers Hit Hard

Investors apparently think banks will be pressed to maintain net interest margins as the Federal Reserve board raises short-term rates to rein in the economy and thwart inflation.

They sold of bank stocks - which has performed better than the rest of the stock market since the central bank began increasing rates last Feb. 4. Money-center banks were particularly hard hit, but regional bank stocks also felt the sting.

Among money-centers, Bankers Trust New York Corp. stumbled $1.25 to $67,625, Citicorp dropped 62.5 cents to 37.625, and Chase Manhattan Corp. slipped 37.5 cents to $33.75.

In the regional group, First Interstate Bancorp slid $2.375 to $81.50, NationsBank Corp. fell 87.5 cents to $52.125, First Union Corp. lost 75 cents to $44.875, and Keycorp declined 75 cents $30.125.

It was "a day not to stand in the way," one analyst said.

"It was very sloppy out there today. Probably the best thing to do is let things run their course and then look for the inevitable opportunities," added Frank J. Barkocy, senior bank analyst at Advest Inc.

"We'll get a better sense on Monday about how things are going," he said, adding that there will be "some attractive points of entry into the bank group."

There was some sentiment that the Fed would act immediately to raise rates. That did not happen, but the market and many economists assume that new credit tightening moves are inevitable.

"I think the door is open," for the Fed to raise rates, said Robert G. Dederick, senior economist at Northern Trust Corp. in Chicago.

"The question is no longer if the Fed will tighten [credit] on May 17, but whether they will do it sooner and by 50 basis points rather than 25" on the federal funds rate, he said.

The policy making Federal Open Market Committee of the Fed next meets on May 17 in Washington to review the nation's business conditions. Two of the three rate increases by the Fed over the past three months have been made at the meetings.

The three previous movements have been in 25-basis-point increases in the Fed's target for the federal funds rate - the rate among banks for over night borrowings.

Mr. Dederick said the Fed is also likely to increase the discount rate at the next open market committee meeting, if not sooner.

The previous Fed rate hikes have sparked criticism from some economists who think the economy's expansion is nonin-flationary because it is "productivity led."

"The data that have come in this week mean the barries are down" to further rate hikes, the economist said. "There is nothing to suggest the Fed has not been doing the right thing" in moving to slow the economy's growth rate.

Nonfarm Payrolls Rise

The ruckus on Wall Street centered on the federal government report Friday that nonfarm payrolls, the most closely watched component of its monthly employment survey, jumped 267,000 in April.

Moreover, March nonfarm payrolls were revised upward to 464,000 from the originally reported 456,000. Most economists had been expecting a downward revision.

The bond market plunged on the data. The yield on the benchmark 30-year bond rose past 7.5%, a new recent high, and the Dow Johnes industrial average slipped 26.47 points to 3,669.50.

Many on Wall Street said they expect the Fed to raise rates ahead of the May 17 meeting, given the turmoil in the markets.

The central bank would have to act today in order to act ahead of the so-called quarterly refunding, of three- and 10-year Treasury notes. That is scheduled for Tuesday and Wednesday.

This week, surveys of March industrial production and manufacturing output reports are due on Wednesday with economists forecasting a 0.2% increase in production, after February's 0.8% leap.

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