Stocks: Bank Stocks and Broader Sectors Reclaim Some Ground in Slow

Investors bid up financial institution stocks during much of Monday, but larger banks ended up losing ground in a late-day selloff by hungry profit-takers.

BankAmerica Corp. dropped $1.0625 a share, to $52.8125; Citigroup, 56.25 cents, to $34.875; and Mellon Bank Corp., 12.5 cents, to $54.0625.

As a group, regionals fared well, as investors bought shares that were trading at half their July prices. Fifth Third Bancorp was up $3.25, to $61.25 a share; Fleet Financial Group, 56.25 cents, to $33.8125; and KeyCorp, 12.5 cents, to $26.5625.

Among the regionals, "you're seeing a bit of a bounce for a group that was oversold," said Don Kauth, a banking analyst at BT Alex. Brown.

Bankers Trust lost $4.625 a share, to $54.25, after a downgrading by Fitch IBCA over concerns about upcoming earnings. The stock failed to bounce back after Bankers Trust issued a statement saying, in part, that it is strategically diversified and "well capitalized with a strong balance sheet."

Wells Fargo & Co. dove $16.75, to $319.8125, after two million shares were sold in a block trade early in the afternoon. Norwest Corp., which plans to buy Wells, shed $1.625, to $32.50.

Investors also continued shying from banking companies with overseas exposures, including J.P. Morgan & Co., off $2.375 to $80.25.

For the day, the Standard & Poor's bank index gained 0.19% and the Dow Jones industrial average, 1.29%. The Nasdaq bank index was up 3.09%; the S&P 500, 1.35%.

The gains came as investors bet on a positive spin domestically from moves by Japan to adopt economic reforms and save its large banks from failing.

On the other hand, "it could be just a lack of bad news" moving the market upward, one trader speculated.

Though the gains were welcomed in the slow Columbus Day trading, no one was celebrating too loudly.

"There are still big question marks," said Stephen Biggar, a banking analyst in Standard & Poor's equity group. "I'm not quite sure how sustainable this rally is."

Aaron Elstein contributed to this report.

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