Advanta Corp.'s shares gained more ground Monday on continued takeover rumors and new optimism about the company's earnings report due this week.

The stock, which rose $1.25 Friday, jumped another $2.06, a 5.96% gain, Monday to $36.68.

Advanta's "quarter will be better than expected," said stock analyst Thomas Facciola of Lehman Brothers. He said that the beleaguered bank's home equity business has "generated a lot of loans" in the past few months, even as the credit card business might suffer up to $1 billion in losses.

Mr. Facciola named three rumored suitors: National Australia Bank, First Chicago NBD, and G.E. Capital. He said BankAmerica Corp., another possible buyer, "dropped out."

On Friday, sources said National Australia Bank had bid as much as $42 for the stock, but Advanta turned down the offer.

"If they're turning down mid-$40 prices, they must have some interest in staying independent," Mr. Facciola said. "I thought their primary objective was to sell but maybe that's changing."

Elsewhere, positive earnings reports were not enough to lift the majority of bank stocks, as shares fell on weakness in the bond market and fears that rising consumer confidence could lead to inflations and rising rates.

The retail sales report due Tuesday and the consumer price index on Wednesday should show modest increases, reversing a downward trend over the past three months, economists said.

Investors in bank stocks had been shaken after Wells Fargo & Co.'s warning last week that earnings would fall far short of analysts expectations for the quarter. Although the sector recovered by the week's end and began the day higher on Monday, by the end of the session the Standard & Poor's bank index dropped 1.13 points to 559.52. The S&P 500 eked out a 1.69 point rise, to 918.37, while the Dow Jones industrial average gained 1.17 points, to 7,922.98.

Wells Fargo's stock dropped $5.25, to $265.50.

NationsBank Corp. rose 68 cents, to $67.31, while First Chicago NBD Corp. rose 43 cents, to $63.43. Both companies barely hung on to earlier gains from positive earnings reports.

The market played the "buy on the rumor, lighten up on the news," game, said Michael T. Mayo, bank analyst for Credit Suisse First Boston. "People have been talking about favorable earnings for three weeks now.

"We'll probably go through this drill a few times more before the end of the year."

Charles Peabody of Mitchell Securities, however, sounded a somber note. The bearish bank analyst is advising his clients to "devise exit strategies" from bank stocks.

"I think the risk is too great," he said. "Banks are trading at relatively high levels versus the market if you use the last 15 years as a valuation parameter."

Mr. Peabody said he was taking a show-me attitude. "If banks can perform well through a full business cycle, then I can make the argument for higher valuations, but not yet." He said he expects share prices to drop 50% to 100%. u

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