driving up its stock in anticipation of an announcement the company said would be made at noon.

But that enthusiasm turned to ho-hum once investors learned what the big deal was: Former Treasury Secretary Robert E. Rubin was joining Citigroup.

Citigroup then lost much of what it had gained. The spurt of excitement had pushed its shares up $2.50, or 5.2%, but they closed the day at $48.6875, for a 1.8% rise -- better than registered by most bank stocks. The American Banker index of the top 50 U.S. banks closed down 0.5% for the day, erasing morning gains. Similarly, the AB225 fell 0.3% for the day.

Bank equities were mixed, with no new catalyst to move the group decisively in any direction.

Just like the spurt and drop in Citigroup shares on Tuesday, the market's enthusiasm about reports on Friday that the Glass-Steagall Act of 1933 was near enactment turned out to be short-lived. In contrast to Friday's 4% bank stock rally, investors lost interest in banks once many concluded that the new law would not bring many of the bottom-line benefits they had expected.

David Stumpf, for example, an analyst for A.G. Edwards in St. Louis, warned in an interview Tuesday that banks could be hurt if they pay very high premiums to acquire other financial services firms, such as insurance companies, as the bill would allow.

"The news on the HR 10 was an interim positive," Mr. Stumpf said. "But when you look longer-term, it is probably a bigger positive for insurance stocks than bank stocks. If banks go after insurance companies with the same disposition they did with each other, will they overpay? If their track records hold up, they will.''

Without financial-reform euphoria, bank stocks remain hostage these days to investors' rate fears and skepticism over the quality of third-quarter earnings.

With the earnings season over, investors have become inflation-sensitive again, focusing on economic data. But the market appears to be in a negative mood, reacting more fiercely to news that may lead to a rise in interest rates and ignoring news that hint that rates will stay where they are.

For example, the market showed little reaction to a report Tuesday by the New York-based Conference Board that consumer confidence had fallen for the fourth consecutive month.

Analysts said they were not sure if the market would react strongly even if the Federal Reserve does boost rates. Many say the markets have already factored another Fed hike into stock prices.

"Most investors want to get this out of the way," said Adam Lewis, a vice president and trader at Keefe, Bruyette & Woods Inc. in New York. "As long as the market keeps guessing, we'll have this volatility."

Those expecting a rate hike are hoping the Fed will drop its bias toward tightening as it makes the increase.

"If the Fed goes to a neutral stance after a hike, then the market can take a breather and not worry about the third shoe to fall," said Katrina Blecher, an analyst at Brown Brothers Harriman in New York.

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