Bank technology stocks surged for the week amid economic news that minimized fear of an impending Federal Reserve interest rate hike.

The Labor Department said Friday that consumer prices rose 0.1% in August - half the expected increase. In a separate report, the Commerce Department said retail sales rose only 0.2% in August, also less than expected.

A day earlier, the Labor Department's producer price index showed that prices paid to factories and farmers rose only 0.3% in August.

Collectively, the news tempered inflation fears, and the market flourished. The Dow Jones industrial average closed at 5838.52 Friday, an all-time high. It closed up 178.66 points for the week.

On the Nasdaq, where many technology stocks are traded, the composite climbed 49.21 points for the week to close at 1188.6. Electronic commerce companies led the charge among bank technology providers.

Dimitri Triantafyllides, an analyst at Interstate-Johnson Lane, Charlotte, N.C., said investors are once again looking to companies such as Premenos Technology Corp. and Cybercash Inc., "which tend to underperform in the market."

"It could be that the market is going from overly pessimistic to becoming more optimistic," he said.

The price of Premenos shares rose nearly 40% on news of a deal to sell its data encryption software to AT&T. Stock in the Concord, Calif.-based company was up $6.875 for the week, closing at $19.

But Intuit Inc. still is feeling the effects of negative forecasts. Mary Meeker, an analyst at Morgan Stanley & Co., cut her revenue growth estimates for its 1997 earnings to 79 cents per share, down from $1.05 per share.

The company's stock, which has lost about 45% in value since May, closed Friday at $30.125, down $2.125 for the week.

Card processors generally experienced a downturn last week. Jeffrey L. Davis, an analyst at NatCity Investments Inc. of Indianapolis, attributed the decline in part to General Electric Capital Co.'s announcement that it will charge an annual fee to credit card customers who regularly pay off their balances.

"Something happened this week," among card processors, he said. "All these companies are geared to volume."

He said the market fears other issuers will follow GE's lead, which will cause a drop in the number of cards issued and, by extension, a drop in transaction volume.

Elsewhere, Pegasystems Inc., a Cambridge, Mass.-based developer of expert systems for customer service processing, has seen its stock appreciate nearly 100% since a low of $10 after its initial public offering last July.

The company supplies software to banks, mutual funds and credit card organizations. Shares of Pegasystem's stock climbed $3.25 for the week, closing Friday at $21.5.

In other news, PMT Services Inc. of Nashville said it earned $3.52 million for the quarter ending in July, compared with earnings of $1.11 million in the year-earlier period.

PMT earned 10 cents per share, beating Wall Street's consensus estimate by a penny. The company, which sells electronic credit card authorization and payment system services to merchants, earned five cents per share in the year-earlier period. PMT shares were down 50 cents for the week to close at $17.875.

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