Still plagued by concerns over proposed caps on credit card interest rates, banks stocks continued to lose ground on Monday despite a 30-point recovery in the Dow Jones industrial average.

"The banks opened weak and they stayed weak, with a couple of exceptions, although the market itself gained some positive momentum after a lot of early uncertainty," said Frank J. Barkocy, the senior banking industry analyst for Advest Inc.

President Bush, who has nudged banks to reduce card interest rates voluntarily but declined to support a mandatory cap, was said to be carefully following the market's course after its 120-point drop on Friday.

MBNA Takes the Brunt

One of the biggest losers was MBNA Corp., which was off $1.25 to $28.875.

Shares of MBNA, the credit card firm spun off a year ago by Baltimore's MNC Financial Inc., have lost nearly a quarter of their value since the interest rate limits were proposed last week.

Meanwhile, damage spilled over to other bank stocks, including shares of the nation's premier money-center bank, J. P. Morgan & Co.

It was off 50 cents, to $62.875, while Bankers Trust New York Corp. was off $1.125, to $63.75.

'Buy' Ratings Emphasized

Elsewhere, NCNB Corp., Charlotte, N.C., was off 75 cents, to $37.375, and Mellon Bank Corp, Pittsburgh, was off $1.375 to $34.875.

MBNA and another card firm, Advanta Corp., got some support Monday from bank analyst Allerton G. Smith of First Boston Corp., who reiterated "buy" ratings on the shares. Advanta's shares were ahead $2.625 to $28.25.

Mr. Smith said he was convinced that a card rate cap "won't go through" Congress and would be vetoed by President Bush if it did.

He also noted that MBNA issues affinity cards to special groups - such as fans of particular athletic teams - who are less likely than others to change card issuers.

But the question of card rates is probably far from dead, Mr. Barkocy said. "This is going to be an ongoing issue, and it is going to cost the banks," he said. "The pressure is there for voluntary rates cuts and this will be an earnings diminution factor going forward."

Damage-Control Scenarios

If that happens, however, "it gives them more time to minimize the impact "through restriction on credit, higher merchant fees, higher annual fees and other measures."

The biggest gainer among the nation's 50 largest banks was Banc One Corp., Columbus, Ohio, a major card issuer that was hit hard last week by speculation on a congressional rate cap. It was ahead $1.625 to $44.625 Monday afternoon.

But Banc One's stock illustrates the recent damage to bank issues.

Despite its Monday strength, it was still 5.5% below its closing price last Wednesday, just before the U.S. Senate unexpectedly approved a 14% ceiling on card rates.

"The fundamentals have come back into view on Banc One," said Nancy A. Bush, a regional banking analyst at Brown Brothers Harriman Inc. who follows the well-regarded midwestern superregional institution.

Domino Effect in Market

Worries that the debate over card rates indicates the economy has not recovered caused other stocks to fall as well.

The usually buoyant shares of the Student Loan Marketing Corp., for instance, were off $1.375 to $56.75.

Besides Banc One, the short list of rebounders included Wells Fargo & Co., San Francisco, which was up $1.50 to $61.125.

Wells was hit hard on Friday, falling $2.625 after saying further real estate-related credit problems in California could not be discounted.

"The past few days have provided a convenient opportunity for people who had profits in some of these stocks to finally say the party may be over for a while and trim positions," Ms. Bush said.

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