Bank technology stocks ended mixed for the week, continuing a two-week run in which the sector has bounced back from its dreary summer performance.
Analysts attributed the mini-rally in part to favorable analyst reports. Bank technology companies receiving Wall Street plaudits in the last few weeks include First Data Corp., DST Systems Inc., and First USA Paymentech.
Also boosting the shares of credit card processors' was the Federal Reserve's decision to hold interest rates in check.
Edwin C. Ciskowski, an analyst at Milwaukee-based Cleary, Gull, Reiland & McDevitt Inc., said the recent technology stocks news is part of a trend in which the market either loves them or hates them.
He said investors are doing a "genuine reevaluation of who are the real players and who's making money."
Mickey Levy, chief economist of NationsBank Capital Markets, said the general technology upswing "may just be one of your ongoing sector rotations that are very difficulty to predict."
"Nobody knows what precipitated it or how long it will last," he said.
For the week, technology stocks in general performed better than the overall market. Goldman Sachs & Co.'s composite index of U.S.-traded technology companies, which lists many bank suppliers, edged up 0.24% for the week, closing Friday at 107.49 points.
The Nasdaq composite was up 10.41 point for the week, closing at 1,230.06. The Dow Jones industrial average ended down 15.54 points for the week, closing at 5,872.92.
In news affecting bank technology companies, First Data's stock climbed after Merrill Lynch & Co. analyst Stephen McClellan hailed it as a well- kept secret whose shares could hit $100 soon.
Its stock was up $1.875 for the week, closing at $81.375.
First Data, a Hackensack, N.J.-based processor of credit card transactions, recently approved a two-for-one stock split to bring the price of its shares close to the median price of stocks on the New York Stock Exchange.
First Data also announced it will spend $67 million to open a second data center in Chandler, Ariz. Company officials said its data processing site in Omaha is nearing its capacity.
Mark Wolfenberger, analyst at Deutsche Morgan Grenfell, New York, said First Data and other firms, including Transaction Systems Architects Inc. and HNC Corp., will be "the big winners in this move toward a cashless society."
"With those companies, you own the middle of the transaction stream," he said.
Transactions Systems Architect's stock rose 48% in two weeks.
The company sells transaction processing software to banks through Applied Communications Inc., its main business unit.
In the last few weeks, the company has issued several pieces of news. It struck a deal with Nestor Inc. in Providence, R.I., to use its credit card risk management software, and it also agreed to acquire Open systems Solutions Inc., a credit and debit card processor based in Clearwater, Fla.
Transactions Systems' stock was up $9.375 for the week, closing Friday at $44.875.