In a rousing performance, the Dow Jones industrial average and Standard & Poor's 500 index hit record highs Tuesday, but they did so without much help from bank stocks.

The Dow closed at 8,295.61, up 115.09 points, topping its previous high of 8,259.31 last Aug. 6, and the broader S&P was up 8.27 points, to 1,019.01. Investor optimism about the economy and solid earnings from biotech and high-tech companies propelled the drive, market watchers said.

Bank shares posted gains, too. The S&P bank index was up 0.26%, and the Nasdaq bank index, 0.31%. But the action was decidedly muted in contrast to other market sectors.

"Banks have been leaders," said Joseph W. Sunderman, senior research analyst at the Investment Research Institute, Cincinnati. "Today they're taking a back seat. With some rallies not all boats float up."

Bank shares still have plenty of upside potential and "will probably regain a leadership position over the next few days," Mr. Sunderman said. "Things still look very good" for the industry in terms of profit and growth prospects.

Among the top opportunities is Fleet Financial Group, said Anthony R. Davis at SBC Warburg Dillon Read Inc. He raised his rating on the Boston banking company to "buy" from "outperform" and set a 12- to 18-month target price of $92. Fleet shares rose $1.5625 Tuesday, to $78.875.

With $86 billion of assets, Fleet is a tempting takeover target for a large out-of-state bank and is also benefiting from management's effective steering, Mr. Davis said. In the past 18 months "management has quietly executed an internal strategy to enhance market presence, improve profitability, and better position the company for earnings growth."

The result: "Fleet is undergoing a metamorphosis into a more dynamic and better-diversified financial services company from a New England bank whose growth has traditionally been restrained by its stagnant local economy," Mr. Davis said.

Less-glowing reviews have greeted Regions Financial Corp.'s decision to buy First Commercial Corp. for $2.7 billion, or four times book value and 23.5 times First Commercial's estimated 1998 earnings.

Arkansas, where First Commercial is based, "is not one of the higher- growth markets in the South," said Christopher T. Kelley of Morgan Keegan & Co. "I certainly expect some short-term dilution based on the price they paid," he added.

To close the deal, Regions will need to issue about 84 million new shares-equal to 60% of its outstanding stock. That prospective outlay prompted a downgrading, to "short-term market perform" from "short-term buy," by Robinson-Humphrey Inc.

"The large amount of stock supply that has to be absorbed will likely offset, at least for the short term, the strategic fundamentals and benefits" of the teaming, said analyst John Pandtle at Robinson-Humphrey.

Mr. Pandtle maintains a longer-term "buy" rating and a $50 target price for the next 12 to 18 months.

Regions Financial Tuesday edged up 43.75 cents, to $39.5625, after falling $1.375 on Monday's deal announcement.

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