Remember those rumors about American Express and Citicorp last week? What about Advanta Corp., the ailing credit card issuer that was supposed to be sold?

No deals materialized, but the point was made that rumors have the power to move markets in volatile periods. And in this case, American Express shareholders came out on top.

"After a big rumor mill, if nothing happens, in normal trading stocks will fall back to the level they were," noted Jay Suskind, a trader at Ryan, Beck & Co., West Orange, N.J. "But we haven't seen that with American Express, because the market overall is so strong, especially the financial sector."

American Express ended the day 37.5 cents off, at $75.125. The stock reached $78.625 last Friday.

One analyst said information gets distorted as it travels. "You know when you played telephone when you were a kid and the message got corrupted? Why is it any different when you're 35?"

Michael Auriemma, president of Auriemma Consulting Group of Westbury, N.Y., said his own sources were so sure about Citicorp buying American Express that he bought shares of the charge card giant. He hasn't given up on the notion of a deal, even if one is not as imminent as last week's rumors implied. "These things don't happen overnight," said Mr. Auriemma.

He called American Express stock a good investment either way, but acknowledged that a buyout would be the difference between "a homerun or a single."

Advanta is "another stock I own," Mr. Auriemma said. "If it sells, it'll go at $34. If not it will work its way back up to $50." Last March, Advanta plunged 50% after revealing a $20 million first-quarter loss. Class A shares hit $35.875 on Monday, and ended trading on Thursday slightly lower at $35.06. The stock was trading in the $50 range in March.

With consolidation in the news this week-Wachovia Corp. announced a deal with Central Fidelity Banks Inc. in Virginia and Crestar Financial Corp. agreed to buy American National Bancorp-investors are clamoring to predict the next deal.

Indeed, in trading Thursday, NationsBank Corp. shares slipped $1.00 to $66.625 as reports surfaced that it would buy Montgomery Securities, the privately held San Francisco investment bank.

"If I told you today that another bank would be taken out, the rumor would catch like wildfire," said Mr. Suskind.

Among those currently benefiting form takeover whispers is Hambrecht & Quist, the San Francisco brokerage firm. On Wednesday its stock price rose nearly 12%, but was down 31 cents on Thursday to $47.06.

Mellon Bank Corp., Donaldson Lufkin & Jenrette Securities Corp., State Street Corp., and Lehman Brothers Inc. all have been the subjected to, and benefited from, the rumor mill recently.

But caution is advised. "The takeover business is totally speculative," said Mr. Suskind. "It's very precarious to trade that way."

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