Shares of banks and investment management firms were mixed in quiet trading as some analysts advised only selective buying in sectors seen as largely overpriced.

"We're reevaluating our positions and taking a more cautious approach to the banks we follow," said Charles Wittmann, a banking analyst at Wheat First Union.

Steven Eisman, a financial services analyst at CIBC Oppenheimer, offered only a handful of companies, including Countrywide Credit Industries and Merrill Lynch & Co., that he sees as beneficiaries of the continued convergence of the financial services industry.

Appraising the market, both analysts say share prices, though cooled by market dips over the past few days, were still overvalued in many cases.

"It's a matter of how much upside is really left," Mr. Wittmann said. Even his top picks, Commerce Bancorp of Cherry Hill, N.J., and Union Bankshares of Bowling Green, Va., warrant only his second-highest ranking, "market outperform," instead of his top listing of "buy."

In Wednesday's trading Commerce dipped 18.75 cents, to $57.0625, and Union was up 50 cents, to $44. The Standard & Poor's bank index was up 0.43%, and the Dow Jones industrial average edged up 0.59%. The Nasdaq bank index gained 0.54%, and the S&P 500 increased by 0.88%.

Gainers included Chase Manhattan Corp., up $1.50, to $135.125; Norwest Corp., increasing $1.125, to $38.8125; and Summit Bancorp, rising 93.75 cents, to $49.6875.

Mr. Wittmann said he is most troubled that the "overall quality of earnings wasn't there" in the first quarter. "A lot of securities gains bolstered operations this time around."

He added that a lot of shares include acquisition premiums that may not be warranted if a glut of banks put themselves up for sale rather than grapple with year-2000 readiness for their systems.

Greater selectivity is also warranted on the brokerage and investment banking sides, Mr. Eisman said.

His top picks are Citicorp, up 43.75 cents, to $148.9375; Merrill Lynch, gaining $1.875, to $87.125; Morgan Stanley, Dean Witter & Co., rising $2.4375, to $76.6875; and Travelers Group, gaining 6.25 cents, to $60.8125.

He recommends Franklin Resources, unchanged at $53.375, as an appealing purchase target because of its dominant position in international asset management.

Countrywide, up $1.50 at $46.875, and MBNA Corp. which rose $1.1875, to $33.125, are also interesting as merger plays "because of the cross-selling opportunities their portfolios represent," Mr. Eisman said.

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