Bank technology stocks were flat for the week, despite Friday's Bureau of Labor Statistics report suggesting there's no imminent need to raise interest rates.
Goldman, Sachs & Co.analyst Gregory M. Gould said that while technology stocks in general "got the major boost a week ago when the unemployment numbers came out," the latest economic news was not enough to spark another large-scale rally.
Friday's report showed a less-than-expected rise in producer prices.
Goldman Sachs recently developed a new index that benchmarks U.S. technology stocks. The index, which includes many providers of financial services technology, was up 5.5% for the week.
The Dow Jones industrial average rose just 1.48 points for the week, to 5,681.31, while the Nasdaq composite gained 12.28 points over the previous week, closing at 1137.2.
In news affecting banks, US Order, Herndon, Va., and Colonial Data Technologies, New Milford, Conn., signed a merger agreement. The new entity is to be called Tritech Corp.
The deal, worth about $179 million, calls for shareholders of both merger partners to receive one share of stock in the new corporation for each share held. Under those terms, current holders of US Order's shares would own 51% of the new company. The deal awaits shareholder approval.
US Order makes a range of technologies for home banking, including screen-based telephones. Colonial Data provides network services to phone companies.
William F. Gorog, chairman and chief executive officer of US Order, said the deal would create a company that could design, build, and provide content for telephone-based electronic commerce services.
He said the deal would pave the way for the building of phone systems equipped with an array of banking and non-banking functions, such as electronic bill payment, call waiting, and caller identification services.
"It's really a way to jump-start" home banking, Mr. Gorog said, because the new company can give banks" a turnkey solution ... not just for bill payment, but also for stock quotes and mutual fund trading."
The Yankee Group predicts that as many as 50% of all home banking and consumer-based electronic commerce transactions will be handled over telephones by 2000.
The new company would be "very attractive to banks," because it would expand the range of services offered through smart telephones, said Kevin Curtis, a senior analyst at the Boston-based consulting company.
US Order last week reported a net loss of $3.2 million for the second quarter, compared to a $ 1.2 million loss in the year-earlier period.
The company's earnings per share, a negative 15 cents, were generally in line with Wall Street's expectations.
Its stock dropped $3.375 for the week, to $10.625.
Colonial Data's shares rose 60 cents, to $15.2.