Bank stocks, especially those that have been down sharply, could get a double-barreled boost at yearend and during the first days of January, analysts say.

An upsurge usually occurs during the week between Christmas and New Year's Day. Before that week, many investors dump stocks that have fallen in value during the year in order to realize losses that offset taxes on capital gains on other stocks.

As a result, the troubled stocks drop so low that they become irresistible to investors, who snap them up and drive prices higher. This year bank stocks have fallen steeply and have become prime candidates for tax-related sales, the so-called Santa Claus rally, said Andy Collins, an analyst at ING Barings in New York.

Immediately after the Santa phenomenon is the "January effect," in which investors continue to buy up low-priced stocks, he said. This rally usually stretches from the last day of December to the fourth trading day of January.

Mr. Collins said he expects Bank One Corp., First Union Corp., and U.S. Bancorp to be among the biggest beneficiaries of the Santa and January jolts. The reason: Their stock prices plummeted during 1999. U.S. Bancorp is down 30% since Jan. 2, Bank One 40%, and First Union 42%.

Tax-loss selling is particularly sharp in bank stocks this year because the sector has underperformed, said James Ellman, a buy-side analyst at Merrill Lynch Asset Management.

"It is a rational process to minimize tax bills, but it does lead to irrational selling that is not based on fundamentals," Mr. Ellman said. "The process, however, is short-lived, and bank stocks will gain because concerns about Y2K will be out of the way and merger and acquisition activity will pick up."

Eric E. Rothmann, an analyst at First Security Van Kasper Inc. in San Francisco, said, "We have hit bank stock price levels that we have not seen since 1992." He added that "sentiment has gone against banks in the last six months. People will really be looking for high-quality franchises that have been beaten up."

Bank stocks are at bargain-basement prices. Many are trading at a 50% discount to the Standard & Poor's 500 index, according to analysts.

"The only thing that will keep bank stocks from booming big time is the looming possibility of interest rate hikes," said Barings' Mr. Collins.

If that occurs investors will turn to banks that have shifted away from traditional spread lending and concentrate more on fee income, he said.

Meanwhile in Tuesday's market, bank stocks sold off as interest rate jitters flared because of a government report showing stronger than expected retail sales in November.

Retailers' sales volume rose 0.9% last month, the Commerce Department reported, compared with the consensus among economists of a 0.5% increase. Retail sales had risen 0.3% in October. Economists said the jump was fueled by price competition.

The rise suggests that inflation could become a problem and that the Federal Reserve could raise interest rates when it meets in February.

Most investors ignored the good news the Department of Labor released on the November consumer price index, which rose 0.1% - the smallest gain in five months. The CPI had risen 0.2% in October.

The Labor Department also released data on average weekly earnings, up 0.3% in November after a 0.5% increase in October.

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