Bank stocks dodged a bullet Tuesday when the Federal Reserve decided not to raise interest rates, but that does not mean tranquil trading days ahead.

A rate hike would almost surely have triggered a selling wave. Instead, bank shares advanced Wednesday following quick recovery Tuesday after the Fed decided only to lean toward a future credit-tightening move.

Nevertheless, "people are nervous," said Gerard Cassidy, an industry analyst at Tucker Anthony.

"They'll be closely watching the economic statistics that come out" between now and the Fed's next monetary policy meeting in six weeks for hints of what the Fed might do, Mr. Cassidy said.

"Although the first impulse may be to sell bank stocks, that is not the way to go," he said. "Right now there are no signals of rising inflation in housing, wage, and employment statistics."

The sizable jump in the most recent reading of the consumer price index- 0.7% in April-may have been only an aberration, Mr. Cassidy said.

"We've entered a gray area,"said Jonathan Hatcher, an equities analyst at Conseco Capital Management of Carmel, Ind. "There is no clearcut vision of where we're going."

Banks did well Wednesday despite all the uncertainty in the market.

At midday the S&P bank index was up 0.62%, while the Dow Jones industrial average barely broke into double digits, with a 0.12% gain.

Among the day's gainers, Bank of America Corp. rose $1, to $69.25; Chase Manhattan Corp. $1.4375, to $80.1875; and J.P. Morgan & Co. $2.125, to $138.75.

Still, several analysts cautioned that turbulence could be ahead.

"We may see a lot of volatility, but we should look through it," Mr. Hatcher said. "It could be time to do some trading, looking for opportunities that may result from selloffs."

"I would expect to see some softness with bank stocks because investors are quite skittish," said Eric Rothmann, a banking consultant. "But the longer-term trends are strong for earnings and consolidation."

Michael L. Mayo, a bank analyst at UBS Securities, said, "We're still cautious about the bank group regardless of what happens with interest rates. Banks still have to confront year-2000 issues, a capital markets slowdown, and pockets of asset-quality weakness."

Meanwhile, the Fed's move did not temper banks' taste for share repurchase programs. Three institutions announced buyback plans.

Banks use repurchases to bolster investor confidence and support their stock's price by bringing down the number of shares in the market, a move that improves valuation ratios.

Bank One Corp. of Chicago authorized the purchase of up to 65 million of its 1.2 billion shares outstanding.

The bank said it plans to make the purchases periodically over the next few years in open-market or private transactions. The shares will be used for general corporate purposes, including employee benefit plans.

Northern Trust Corp., also of Chicago, said it expanded its common stock buyback authorization by approximately 4.9 million shares. The move will allow the purchase of up to six million shares.

And United Bankshares of Parkersburg, W.Va., adopted a new stock repurchase program for as many as 1.75 million shares.

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