Bank stocks slipped back as investors took profits and considered the dizzying array of merger proposals that are now before them.

Bankers Trust New York Corp. lost $4.50, to $131.8125; Chase Manhattan Corp. slipped $3.5626, to $136.50; J.P. Morgan & Co. shed $5.25, to $137.375; and Wells Fargo & Co. dropped back $5.875, to $374.4375.

"People had gotten excited about the possibilities, and now they're settling back," said Eric Rothmann, a banking analyst at Stephens Inc. "Overall, though, you'll see acquisitions taking place and it will continue moving the market."

Indeed, market watchers see continued strength in the sector. Since February, bank stocks have "materially outperformed" broader markets, said Marni Pont, a banking analyst at Keefe, Bruyette & Woods Inc. "It's been two steps forward and just one step back for bank shares."

The broad gains by banks have given potential acquirers "a lot more currency to go out and do deals," Ms. Pont said. "You'll see activity at all levels, including the smaller ones" that weren't doing deals before.

Some investors were cashing in after Tuesday's surge in bank stocks on another merger proposal - this time less than friendly. Bank of New York Co., which has offered $24 billion for Mellon Bank Corp., dipped $1.50, to $60.5625, while Mellon was off 2, to $76.

Among planned merger partners who are on amiable terms, BankAmerica Corp. dipped $1.50, to $86.1875, and NationsBank Corp. was off $1, to $77; Banc One Corp. slipped 18.75 cents, to $59.8125 and First Chicago NBD was off 12.5 cents, to $94.625; and Citicorp dropped $3.6875, to $156.25, while Travelers Group slipped $1.50, to $63.75.

The Standard & Poor's bank index shed 1.75%, and the Dow Jones industrial average was off 0.36%. The Nasdaq bank index dropped 0.31%, and the S&P 500 slid 0.97%

Some shares managed gains for a second straight day, as investors continued to bet on them as takeover prospects. Pacific Century Financial Corp. rose 12.5 cents, to $25.125; Regions Financial Corp. added 62.5 cents, to $45.25; and State Street Corp. increased 12.5 cents, to $72.875.

SouthTrust Corp., which rose 50 cents, to $43.4375 is another banking company that warrants attention, said David Stumpf, a banking analyst at A.G. Edwards & Sons.

The Birmingham, Ala., institution "continues to exhibit the basic characteristics we admire - quality of earnings, and consistency and quality of earnings-per-share growth," Mr. Stumpf said.

With $32.7 billion of assets and a network extending throughout the Southeast, SouthTrust is "underappreciated" as a jewel franchise, Mr. Stumpf said.

He sees operations continuing to improve as SouthTrust closes on its purchase of 27 Florida branches of Home Savings of America.

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