picking up some ground they lost in recent weeks.
"On the basis of comparisons with the Dow and the Standard & Poor's index, bank stocks look tremendously attractive," said Joseph Stieven, a banking analyst at Stifel Nicolaus of St. Louis.
"Now you're seeing some selective buying,'' Mr. Stieven said. "There's a lot of smart money looking for bargains out there.'' What remains frustrating about the market "is its mood swings," he added.
"The past week was so ugly with so many stocks losing ground," said Mark Davis, research director at Banc Stock Group in Cleveland. Mr. Davis warned about putting too much weight into the rebound.
"This is more of a reflex rally," he said. "There's not a whole lot of conviction in it. I'm not convinced we've seen the decisive low that we need for a strong rally."
Mr. Davis said a lot of sellers remain on the sidelines. "We'll be working our way lower over the next week or so."
Analysts said investors were waiting for the consumer price index and the producer price index, both of which are due before the Federal Reserve meets on Aug. 24.
Despite his short-term pessimism, Mr. Davis predicts that "once we get through Labor Day we'll probably have a nice rally through the end of the year."
The Standard & Poor's bank index added 1.05% and the Nasdaq bank index was up 0.16%. The Dow Jones industrial average was off 0.06% and the S&P 500 lost 0.19%.
Bank of America Corp added 50 cents, to $60.625. Citigroup was unchanged at $42.625, while J.P Morgan & Co. was up $2, to $124.9375.
Among the regionals, Keycorp was up 81.25 cents, to $30.5625; Mellon Bank Corp 50 cents, to $33.625; and PNC Bank Corp 18.75 cents, to $51.1875. Bank of New York Corp. was unchanged at $35.8125.
Carla D'Arista of Friedman, Billings, Ramsey & Co. said she thought the bank was in a strong position for growth, after she attended a meeting with its management.
Management is projecting 15% fee growth for the year, flat net interest income, and 3% to 5% expense growth, Ms. D'Arista said.
Bank of New York is benefiting from high rates of growth and increasing market share in selected segments, Ms. D'Arista said. She cited securities servicing, which has grown 27% this year, and cash processing, up 10%.
The retail part of the bank has $1.5 billion in loans, financed by $1.5 billion of deposits. Because deposits are low-cost funds, this helps the bottom line, Ms. D'Arista said.
Additionally, the acquisition of Royal Bank of Scotland's trust business added $15 billion in funding.
Ms. D'Arista said Bank of New York draws a distinction between its diversified processing businesses and the custody operations of Mellon Bank Corp. and State Street Corp, whose stocks have been under pressure.
She said Bank of New York's view is that the two competitors are much more involved than it is with fixed income, specifically Treasuries and municipals, where issuance has abated as a result of higher tax receipts.
The stock, which has traded off by 10% this year, is attractive at current levels, she said.