Shares of State Street Corp. dipped Friday after a rare investment downgraeg of the widely admired Boston banking company.

State Street shares fell $6, to $87.50, in a session marked by general weakness after a report of strong first-quarter economic growth revived investor worries about higher interest rates.

Analyst Ruchi Madan of PaineWebber Inc. cut her State Street rating to "attractive" from "buy." She said the stock is having a "fabulous run" but also expressed concerned that her revenue growth forecast may be too optimistic.

Ms. Madan said State Street may have subtly telegraphed a slip in business growth in its latest annual report. The company typically highlights new revenue sources in the report, she said, but the 1998 version lacked such information.

A State Street spokeswoman said information about new revenue sources was not included in the 1998 annual report because the company wanted to emphasize other growth areas.

State Street is one of the most well regarded bank stocks and is a longtime industry leader in cultivating fee-based lines of business.

Ms. Madan said a slide in business growth at the company was probably attributable to last fall's market turmoil and would be short-lived.

However, she added, "if revenue growth from new business is indeed slowing," her estimates for 10% to 15% growth for the year are too high. "This is a trend we will continue to monitor closely," she said.

The State Street spokeswoman said the company's first-quarter results ran contrary to Ms. Madan's assessment. State Street reported first-quarter net income of $121 million, up 16% from a year earlier. Revenue increased 17%, to $751 million, the company said.

In his quarterly assessment State Street chairman Marshall N. Carter said operations continue to grow. "In the 1990s we are well on track to achieve our goal of repeating our revenue growth rate of the 1980s," Mr. Carter said.

State Street's goal is to achieve inflation-adjusted, compound annual revenue growth of 12.5% through 2010, which would more than triple revenue by the end of the next decade, Mr. Carter said.

In general, bank stocks sold off Friday after the Commerce Department reported that the economy grew at a 4.5% annual rate in the first quarter, far above the 3.3% consensus forecast.

For the day, the Standard & Poor's bank index fell 0.94% and the Dow Jones industrial average 0.82%. The Nasdaq bank index dipped 0.08% and the S&P 500 index 0.57%.

Shares of Midwest banking companies moved higher as takeover speculation swirled in the region. Analysts said word that St. Louis' Mercantile Bancorp. was in play was moving other stocks.

First Tennessee National Corp. rose 75 cents, to $43.125, and First American Corp. 87.5 cents, to $38.8125. First American, like Mercantile, "is a plum franchise," said John Coffey, a banking analyst at Robinson Humphrey Co. in Atlanta.

First American "would be a strategically important purchase to a handful of potential buyers," Mr. Coffey said. The company would give entree into growing Tennessee and Mississippi markets, he said.

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