Shares of Friedman Billings Ramsey & Co. surged more than 22% Friday, which could mean investors think the small Virginia brokerage firm is in talks to sell.

Friedman Billings' shares jumped on a day when most bank and thrift stocks lagged the market. The change fits a pattern of merger speculation gaining momentum on Fridays.

Alternatively, the company's shares could be rebounding after several weeks of lagging most thrifts.

One possible suitor is PNC Bank Corp., Pittsburgh, which owns a 4.9% stake in Friedman Billings and recently said it would buy Hilliard Lyons, a small brokerage firm in Louisville, Ky.

Officials at Friedman Billings refused to comment on the speculation or the stock activity. PNC officials were unavailable.

"It would not shock me" if PNC was involved, said bank analyst David Stumpf of Keefe, Bruyette & Woods Inc. "PNC is looking to strengthen its underwriting. Most of their acquisitions are more for investment banking powers versus retail brokerage."

Shares of PNC fell 6.25 cents, to $52.125, while shares of Friedman Billings climbed $1.25, to $6.8125.

Most market experts say they think Friedman Billings' chairman, Emanuel Friedman, wants the firm to remain independent. But market events could have changed his mind.

Since it went public last December, Friedman Billings shares have fallen as the market for initial public offerings went soft. After hitting a high of $21 in April, the shares went into a tailspin.

The company stock was also pummeled after it took a $34.5 million loss in the third quarter because of volatility in the capital markets. Friedman Billings specializes in underwriting real estate and small financial and technology companies.

The company has spent the last three months cleaning up its balance sheet, said brokerage analyst Dean Eberling of Putnam, Lovell, de Guardiola & Thornton Inc. "They took a lot risk out of their balance sheet. It may be a while before the company bears fruit, but the balance sheet looks attractive."

Meanwhile, bank stocks lost steam Friday as investors took profits. Market experts, however, say they expect strength in the sector, adding that negative sentiments on bank stocks have pivoted toward cautious optimism.

"Now we have seen that maybe the problems were not as bad as we thought," said bank analyst Henry C. Dickson of Salomon Smith Barney.

The Standard & Poor's bank index fell 0.14%, while the Dow Jones industrial average rose 0.67%. The Nasdaq bank index rose 0.21%, and the S&P 500 rose 0.63%.

Losers included Bankers Trust Corp. $2.1875, to $65.8125; Northern Trust Corp. $1.875, to $77.75; and Wachovia Corp. $3.50, to $92.25.

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