Bank and financial stocks led another market plunge Thursday on investor fears that the global economic flu has spread to Latin America.

Already battered big-bank shares fell harder, with BankAmerica sinking $3.25, to $56.125; First Chicago NBD Corp., $3.8125, to $66.5625; and Citicorp, $4.5625, to $88.50.

For the day, the Standard & Poor's bank index surrendered 4.43%, and the Nasdaq bank index was off 1.62%. The Dow Jones industrial average tumbled 3.17%, and the S&P 500 index fell 2.58%. The Dow was off as much as 338.57 points, before recovering somewhat to close with a 249.48-point decline.

"Investors are scared at this point," said Charles Vincent, banking analyst at PNC Asset Management, Philadelphia.

"First it was Asia, then Russia, and now it's Latin America," he said. "And you don't know yet how extensive the problems are."

Chase Manhattan this week became one of the first major banks to try to report on its exposure in Latin America, disclosing it has spent the last six months reducing investment by more than $2 billion.

The company has traditionally ranked among the largest lenders to Latin America. But it and other banks were badly burned by the Latin debt crisis of the 1980s and all are probably scrambling to guard against a repeat of that painful episode.

Stock markets and currencies fell across the Latin region on Thursday with the action centered in Brazil, where shares slumped 15% in value. Meanwhile, European markets were generally off from 4% to 7% on growing earnings fears.

"Global growth is slowing and earnings momentum is bound to slow further," said Bruce Steinberg, chief economist at Merrill Lynch & Co. Though the U.S. economy is in good shape, "it is by no means immune to global contagion," he said.

Accelerating developments concerning the investigation of President Clinton added to investor uncertainty.

Seeking positive news, market players are awaiting further word from Federal Reserve chairman Alan Greenspan, who is set to testify before the House Banking Committee Tuesday.

"The market has a momentum of its own at this point," Mr. Vincent said. "You'll see selling until some sort of bottom is discerned." He and others declined to project where the floor may be. Meanwhile, many investors appear sidelined, perhaps until third-quarter earnings offer a better picture of business conditions.

"Quality will be paramount," Mr. Vincent said. "I'll look askance at any bank that is stretching its earnings." Banc One Corp., Fleet Financial Group, and NationsBank should be among the best positioned, he said.

Keefe, Bruyette & Woods is also recommending regional banks that have very little exposure to what's occurring overseas. Fleet and National City Corp. are among the most promising, said analyst Thomas Theurkauf.

Silicon Valley Bancshares endured two downgrades amid the selloff, from BT Alex. Brown and Van Kasper & Co. Its shares plummeted $10.84375, to $14.8125.

In a statement, the $3.1 billion-asset banking company, until recently a favorite of analysts, said it expects third quarter nonperforming assets to rise to between $40 million and $45 million.

But it said it does not expect the increase to hurt its third quarter results, which are expected to fall in the range of analysts' expectations of 40 to 42 cents a share.

"Disappointing credit trends continue," said Joe Morford of Van Kasper. He noted that even though most of the problems have been identified, and are confined to a couple of large loans, "the market will be skeptical and is likely to fear the worst."

The company expects to release its third-quarter earnings on Oct. 15.

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