Bank shares were mixed on Monday, signaling to analysts that the sector had stabilized after last week's battering. The Dow industrials lost 28.64 points to close at 3,303.
"On balance the bank stocks have stabilized," said Judah Kraushaar, an analyst with Merrill Lynch & Co.
Analysts don't believe the bull market for banks stocks is over. But they said investors will become more selective.
"I think there are still a lot of nervous holders of bank stocks," said David S. Berry, an analyst with Keefe, Bruyette & Woods Inc.
Shares of seven of the 10 top banks by market capitalization rose, led by Bank-American Corp.
Its shares rose by $2.75, to $44.25, as investors gained confidence with the release of second-quarter earnings.
Those earnings, for the first time including the acquisition of Security Pacific Corp., indicated that the asset quality problem was milder than some analysts expected.
Wells, First Interstate Up
The two other major California banks rose as well. Wells Fargo & Co. shares gained $1.50, to $73.25, and shares of First Interstate Bancorp rose $1.125, to $41.
Nations Bank Corp. gained $1.25, closing at $47.125. Comerica Inc. led the losers. Its shares kept falling, dropping $1.125, to $57.875.