Bank shares dropped with the bond market. The Dow Jones industrial average gained 9.50 points, to 3,544.78.

Shares of J.P. Morgan & Co. lost $1.125, to $70.875. PNC Bank Corp. shares fell $1.125, to $29.875.

S.G. Warburg upgraded shares of Chase Manhattan Corp. to "buy" from "hold." Francis X. Suozzo, a Warburg analyst, said earnings were improving more rapidly than expected.

In addition, the stock, which trades around book value, is relatively cheap. Chase's shares lost 25 cents, to $32.25.

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