Peso sellers weakened the currency further for the fourth straight day Friday, but there were signs that the anxieties that have gripped the Mexican financial markets eased a bit.

The peso closed at 4.625 to the dollar early Friday afternoon, cheaper than its 4.60 level Thursday, when the currency dove 16 percent. Analysts said the slight drop today was an indication of some return to stability."The market is returning - behaving normal," said Francisco Blanco at Casa Bolsa Arka, an investment firm in the northern city of Monterrey. "Things are getting quiet, but it needs a little time get back to normality."

"I think what we saw was speculation and panic selling," said Bob Walberg, an analyst with MMS International. "It's slacking off a little bit. That reflects the reality of the situation. Some of the speculative excesses are beginning to run out of the market."

The Mexican stock market also was much less wobbly Friday. The market's main index closed up 35.59 points to 2,341.85. Analysts said investors were bargain hunting because of the peso's lower value, but that would be short-lived.

The peso has lost almost one third of its value against the dollar this week in an economic crisis that has dulled some of Mexico's allure as the darling of overseas investment opportunities.

An insurrection in the southern state of Chiapas was partly to blame, but the sudden loss of value in Mexican assets was a sobering reminder that Mexico's economy still has underlying problems.

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"Mexico won't be a very exciting place to invest over the next few years," said Geoffrey Dennis, an analyst at Bear, Stearns & Co. in New York. "American investors are really taking this on the chin."

Treasury Secretary Jaime Serra Puche met Thursday with Wall Street firms in New York and was told that the abrupt currency reversal and a failure to signal the crisis had hurt his government's credibility.

"In the short term, I'm uncertain about where the peso is going," said Suhas Ketkar, a Latin American analyst at First Boston Corp. in New York. "I think people are going to be more cautious about emerging markets. I wouldn't be surprised if Asian markets even feel the pinch."

Emerging markets elsewhere in Latin America were the focus of just such worries, unable to shake the fact that one of their leaders had stumbled just a year after launching the North American Free Trade Agreement with Canada and the United States.

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