Earnings reports may kindle a rally in bank stocks this week, but most Wall Street analysts do not expect any sustained market momentum for these beleaguered equities.

"They may run up a bit before the earnings come out, but later in the month I imagine we will probably see them selling off again," said Katrina Blecher of Gruntal & Co., New York.

Analysts at Kemper Securities Inc., Chicago, said in a recent forecast of bank stock trends this year that they expect little longer-term investor support "until the interest rate situation is clarified."

Banks cautiously joined in the overall market upswing Friday, but they generally finished the old year and launched the new one behind the pace of other stocks amid continuing concerns about rates.

In the five trading days ended Thursday, the American Banker index of the 225 largest publicly traded banks was up a meager 0.75%, while the Dow Jones industrial average was up 2.91% over the same period.

"I'm a little more positive on the stocks," said Ms. Blecher, "because they've come down to such low valuations at this point."

On the plus side, the analyst sees rate fears diminishing. Furthercredit tightening by the Federal Reserve "won't be nearly what we saw in '94," she said.

On the minus side, she foresees a slowdown in loan demand at banks as the economy slows down in response to higher rates. "In the South and Midwest, we are already starting to see it," the analyst said.

But Ms. Blecher sees an economic slowdown as a basis for optimism. "People have taken down the bank stocks while the other sectors really haven't been hit yet. When that happens, I think the banks will outperform on a relative basis."

Kemper analyst Thomas J. Maier on Friday upgraded shares of Marshall & Ilsley Corp. to a "long-term buy" rating from "market performer" based on new business opportunities. The Milwaukee company's shares were unchanged at $18.125 in afternoon trading.

Mr. Maier said M&I may eventually add revenues of as much as $10 million annually from a major new agreement to provide billing and payment- processing services to Wisconsin Electric Power.

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