PNC Bank Corp's.'s shares sagged Thursday on a report that the banking company may acquire Oppenheimer & Co., the New York securities firm.

PNC stock fell $1.50 to $41 on a day when most banks' shares staged a modest recovery from Wednesday's big selloff.

The Wall Street Journal reported Thursday that PNC is in negotiations to buy Oppenheimer for $500 million in cash, stock, and options. Fleet Financial Group was also said to be looking at Oppenheimer.

Oppenheimer and PNC declined to comment. PNC has "a long-standing policy of not commenting in the area of speculation on mergers and acquisition," said Jonathan Williams, a spokesman.

Wall Street banking analysts were uncertain what to make of a possible deal between Pittsburgh-based PNC and Oppenheimer, as well as of the price mentioned.

Industry analyst Elizabeth Summers of Ryan Beck & Co., West Orange, N.J., said she knew little of privately held Oppenheimer, but noted that the market appeared unhappy with the potential liaison.

"Most of the market is up, and PNC's stock is down," she said. "This is a clear signal of what the market thinks of the deal."

The Standard & Poor's bank index improved 0.43% on Thursday. That compared to a gain of 0.72% by the Dow Jones industrial average. The S&P 500 rose 0.56% and the Nasdaq Bank index increased as well.

Ms. Summers also noted that Fleet Financial's shares were up 25 cents to $61.625.

Analyst Lawrence W. Cohn of PaineWebber Inc. said the advantages of a possible combination of PNC and Oppenheimer were not clear.

"I ask myself what exactly PNC would be looking for in making that kind of acquisition and what Oppenheimer would bring," he said. He noted that Oppenheimer's retail customer base "is more inside of Fleet's territory."

Mr. Cohn dismissed other recent merger rumors involving banks and brokerage firms. "I'm not convinced that we will see as much activity between banks and brokerage firms as people say," he said.

At the same time, however, the analyst said Chase Manhattan Corp. and BankAmerica Corp. may be looking to buy brokerages.

"Chase has made no secret that it wants to build an equity business and prefers to do it internally," Mr. Cohn said. "But the Alex. Brown and Bankers Trust merger tilts the business plan toward making an acquisition."

And BankAmerica, which has a large corporate business, cannot indefinitely delay acquiring a brokerage firm, he said.

Another analyst, who asked not to be identified, said, "Chase is doing a wholesale search and is looking at anything available."

Brokerage analyst Christopher M. Reed of Duff & Phelps Credit Rating Co. said banks are increasingly looking to buy brokerages because of the Federal Reserve's decision to increase banks' section 20 powers, permitting 25% of revenues to be gained from investment banking, up from 10%.

That makes it more reasonable for banks "to buy smaller regional brokerage operations instead of building up from scratch." said Mr. Reed.

With an acquired brokerage firm, banks can "lever off the traditional banking relationship to grow the business."

Meanwhile, analysts were disheartened that the comeback staged by bank stocks on Thursday fell short of a full recovery from Wednesday's carnage.

"It is a little distressing because banks sold off more sharply than the rest of the market on Wednesday, but are not rebounding in line with the market (on Thursday)," Mr. Cohn said.

The day's gainers included Citicorp, up $1.25 to $115; J.P Morgan & Co., up $1.50 to $102.875; and First Union Corp., up $1.125 to $84.125.

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