It's a tough time to play financial stocks, especially for investors who have been sitting on their hands the past few weeks. That's because up until Monday's broad selloff, bank and brokerage stocks had been on fire. Now, there's reason to believe that many banks and brokerages won't be able to hold their gains in the coming months, especially if the economy can't shake its doldrums and the Federal Reserve moves to cut interest rates again, as many now expect it will. The recent gains in financial stocks would seem to suggest that investors believe the economy is on the verge of a powerful recovery in the second half of the year. Since mid-March, when investors were still trying to handicap the outcome of the U.S. invasion of Iraq, financial stocks have risen 10% to 30%, on average. But skeptics say there's little evidence of any recovery yet, even though consumer confidence has perked up a bit with the end of active combat in Iraq. Moreover, there's reason to doubt whether revenue growth at the nation's banks and brokers can match the most bullish expectations of investors. David Trone, a financial-services analyst at Prudential Securities, contends that some investors in brokerage stocks seem to be banking on a revival in investment banking business. But Trone, in a recent research note, said there's no "tangible evidence" of any real thaw in the market for initial public offerings or corporate merger advisory work. So Trone is advising Prudential customers to take a breather on the stocks of Wall Street firms. In particular, he lowered his rating on shares of Merrill Lynch ( MER) to hold from buy, noting it will be harder for the firm to generate stronger profits in the near term because it can't squeeze any further savings out of cost cuts.