A glowing report about Chase Manhattan Corp. in Tuesday's issue of The New York Times had little impact on the bank's stock price.
Chase's stock fell 2.10%, more than the 0.41% drop in the Standard & Poor's bank index.
But that did not chill the enthusiasm of bank analysts. Susan Roth, an analyst at Donaldson, Lufkin & Jenrette, said she is impressed by some of the steps taken by William B. Harrison since he became president and chief executive officer on June 1.
Those steps include forming an Internet unit and shuffling some top executives. Ms. Roth said these moves signal a willingness to keep the bank moving forward, both strategically and financially.
Because of the successful integration of Manufacturers Hanover Trust Co., Chemical Banking Corp., and Chase Manhattan Corp., "the new Chase has emerged as one of the most powerful players in the global banking and financial services arena," Ms. Roth said.
She said Chase has already achieved what many of the financial service industry's megamergers are striving for: "scale and marketship in its core business."
Chase appears capable of generating 10% to 12% average annual earnings per share growth, Ms. Roth says.
She is especially upbeat about Chase's new Internet unit, which will offer free on-line banking, free bill paying, and investment services, and make credit decisions for credit cards and personal loans.
The company will roll out more services this fall, including bill presentment, full mortgage banking capabilities, and discount brokerage services.
With its enhanced technological platform in place and a full array of products on its Web site, Chase expects to begin a more aggressive marketing campaign, Ms. Roth said.
"Until then we expect steady monthly customer account growth" in line with what Chase has already seen, Ms. Roth said. "The recent prioritization of the bank's Internet activities, implied by the creation of chase.com, supports our confidence in Chase's ability and willingness to offer an even more competitive on-line product array in the very near future," Ms. Roth said.
Overall, stocks opened lower, with the Dow Jones industrial average losing its gains of the prior day with a 70-point decline in Tuesday's first hour of trading. The Dow gained back some of its ground, ending the day with a 0.87% drop.
Market watchers attributed the decline to selloffs as-for the second straight day-long bond yields moved above 6%. The yield's resurgence has a dampening effect on stocks, especially financial issues.
Investors also remained jittery about the upcoming meeting of the Federal Reserve.
"It should be O.K. for banks if the Fed only tightens rates once," Ms. Roth said. She said Wall Street hopes that Fed Chairman Alan Greenspan will "send a message that only one tightening was necessary."