Bank technology stocks were mixed for the week, as investors took profits from the sector's resurgence since September.
But the Dow Jones industrial average and several market indexes reported all-time highs amid economic reports that eased concerns about inflation.
Gregory Gould, analyst at Goldman, Sachs & Co., said technology stocks may be peaking earlier than other industry sectors.
Services and computer companies rose 10% in value since mid-September, Mr. Gould said, "which was when the most recent trough was, so you just may be seeing a little bit of profit taking."
He noted that Goldman Sachs' composite index of U.S.-traded technology stocks has gained 27% since January.
Key economic news released last week included:
*A smaller-than-expected rise in housing starts in September, according to the Commerce Department.
*A Labor Department report showing first-time claims for state unemployment benefits were higher than expected.
*Another Labor department report that consumer prices rose 0.3%, or 2.8% at an annual rate.
Collectively, the news was a sign of no impending interest rate hikes, and helped propel the Dow to a record high of 6,094.23. Friday. For the week, it was up 124.85 points.
The S&P 500 index also broke into record territory, closing Friday at 710.82, up 10.16 points for the week.
In an investment report issued last week, Goldman Sachs officials are "bullish" on technology. Capital spending on technology and related services will remain strong throughout 1997, officials predicted.
The report further estimated the technology sector companies will experience a 30% growth in earnings next year, compared to 10% growth in overall corporate profits.
Among bank technology firms, the stock price of Verifone Inc., Redwood City, Calif., plummeted $10.375 to close at $31.625 Friday.
Investors punished Verifone's stock when third quarter earnings fell short of expectations.
Verifone, which supplies electronic payment systems to merchants and other industries, said its net income was $11 million for the quarter, up 18% compared to the year-earlier period.
The company earned 42 cents per share, versus Wall Street's consensus estimate of 44 cents per share, as published by IBES International Inc.
While sales grew both in the U.S. and abroad, the rate of increase was slower than in the past, Verifone officials said.
Elsewhere, BHC Financial Corp.'s earnings beat analysts' expectation.
The Philadelphia-based company is a third-party processor for securities brokerage affiliates of banks and broker dealers.
The company earned $3.7 million for the quarter, or 57 cents per share. That was 10% rise over the comparable period last year. BHC Financial bettered Wall Street's consensus estimate by five cents.
But that news was tempered by an announcement that USAA Brokerage Services Co., San Antonio, will end its servicing contract with BHC later next year and operate its brokerage operations inhouse.
USAA, a 12-year customer of BHC Financial, contributed 9% of revenues last year. Norwest Corp. and Chase Manhattan Corp., among several other banks, also recently ended contracts with the company, opting to handle brokerage operations in-house.
Observers suggested that USAA announced early to steer clear of regulatory trouble, since it is a major shareholder in BHC Financial.
Another shareholder, Private Capital Management, Naples, Fla., has proposed to purchase BHC Financial.
Lawrence Donato, chief financial officer, said BHC's board has formed a committee to evaluate the proposal and "will respond in due course."
BHC Financial's stock price rose $1.125, closing Friday at $16.50.
SPS Transaction Services, Riverwood, Ill., reported net income of $5.6 million for the quarter, a 52% drop compared to the same quarter last year.
Officials there said the results stem from the deterioration in consumer credit quality.
The company provides credit card processing and private label card services. The company earned 21 cents per share, in line with Wall Street's consensus estimate.
Robert L. Wieseneck, president and chief executive, said the company has "taken aggressive corrective measures to help mitigate the effects of the negative factors," such as tightening credit policies, changing cardholder terms, and increasing pricing.