Investors caught their breath Monday, taking profits during a comparatively quiet session on Wall Street after last week's explosive runup of bank stocks and other shares.

The Standard & Poor's bank index managed a small gain, 0.72%, to 555.10, but still outpaced the market indexes. The S&P 500, the broad market gauge, edged up 0.08% at 893.9, while the Dow Jones industrial average of 30 blue- chip stocks slipped 0.13%, to 7,772.09.

"After the tremendous move last week, profit taking is in order," said Anthony J. Polini, banking industry analyst for Advest Inc.

Meanwhile, Mr. Polini continues to support the prospects for bank stocks. The economy right now, with its low inflation and moderating growth, is "the perfect climate for banks. We feel very bullish on the group," he said. He expects banks to continue earnings growth at 12% to 14% in 1998.

Shares of Advest itself defied the quiet market Monday, jumping 11.83% or $2.75, to $26, on speculation that the Hartford, Conn., brokerage firm might be bought by Fleet Financial Group.

The rise today follows a 28% gain on Friday after Business Week said two Boston banks-identified by market sources as Fleet and BankBoston Corp.- were interested in a deal. Fleet's stock fell 12.5 cents, to $63.875.

American Express Co., which advanced $3.375 a share last Friday, dropped $1.375, to $75.25, after another round of rumors about a Citicorp buyout disappeared over the weekend.

"Citicorp and Amex admitted they had some discussions late last year, so that gave speculators some ground for hope that talks could resume," noted bank analyst Mark Alpert of Alex. Brown & Co.

Fridays are popular for rumors because investors think most big announcements are finalized over a weekend, said Mr. Alpert. "When nothing was announced (on Monday), those who speculated bailed out."

Overall, the markets were quiet awaited the announcement of a series of economic indicators this week, including the new readings on the consumer price index and housing starts on Tuesday.

Brian Jones, a Salomon Brothers economist is "looking for growth numbers tomorrow that could shake investors."

He expects the CPI to be up 0.3% for May, with housing starts strong at 1.5 million. Moreover, Mr. Jones thinks "the second quarter slowdown is behind us and the economy is picking up steam."

That means the interest rate debate will be rekindled, he said.

Nicholas S. Perna, chief economist at Fleet, said lagging retail sales in May, which surprised and buoyed the markets last week when they were reported, was a "largely weather-related pause.

"The economy will snap back during summer months." said Mr. Perna, who predicts that the Federal Reserve will increase rates by August.

The economist noted that the Dow Jones average had risen 20% since Fed Chairman Alan Greenspan offered his "irrational exuberance" comment about stock prices last December.

"If he thought prices were irrational then, what does he think now?" asked Mr. Perna. "This is a very risky period for monetary policy and the markets."

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