Winners & Losers

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Monday's Financial Winners & Losers

Sarina Penn

Financial stocks clambered upward on Monday, largely hemmed in with the upper tiers of the broader market as takeout talks propelled International Securities Exchange (ISE Quote) spectacularly higher.

Reports emerged around midday that the ISE has accepted Deutsche Borse's offer to buy the options exchange for $67.50 a share in cash, or $2.8 billion -- a 47.6% premium to its latest closing price. The German exchange launched the bid through its Eurex joint venture with SWX Swiss Exchange. ISE shares rocketed $20.97, or 45.9%, to $66.69.

The NYSE Financial Sector Index, of which the ISE is a component, enjoyed a 0.2% spike to 9,828.30 earlier in the day but then lost 0.7% to 9739.75. The KBW Bank Index also rose earlier in the day, to 117.14, before falling 0.7% to 116.06.

Meanwhile, broker Merrill Lynch (MER Quote) saw a slight gain to $90.23 on word it will buy back up to $6 billion of its shares. M&T Bank (MTB Quote) got a 0.5% lift earlier in the day after Bank of America upped the Buffalo, N.Y., bank's rating to neutral from sell, but it closed down 28 cents, or 0.3%, at $111.34.

As for earnings news, American Home Mortgage Investment (AHM Quote) added 4.1% to $24.78 after topping first-quarter estimates by 6 cents a share per Thomson Financial, despite nearly halving its income from last year to 54 cents a share and cutting its 2007 forecast. Asset manager Nuveen Investments (JNC Quote), based in Chicago, posted first-quarter income that jumped 16.7% year over year to $52.3 million, or 63 cents a share -- 2 cents ahead of Street expectations. Shares were up 2.5% at $53.30.

One of the day's biggest losers, however, was Doral Financial (DRL Quote). The Puerto Rico bank gave up 18.6% to $1.40 on word it will need $700 million to $800 million in outside financing this year in order to pay off considerable debt and a securities class-action lawsuit settlement.

National City (NCC Quote) slid 3.1% to $36.55 after the Cleveland bank's first-quarter profit plunged to 50 cents a share from 74 cents last year. Analysts sought 61 cents.

Also losing ground were health insurers WellCare (WCG Quote) and Amerigroup (AGP Quote), among others, after a Jeffries analyst cut the lot to underperform. The analyst cited certain states' slowing economies, which, he said, will tamp down on how generously the companies will be reimbursed through government health programs. WellCare shares recently lost 6.8% to $80.59; Amerigroup was off 3.9% to $28.13.