Updated from 1 p.m. EDT
Ameritrade climbed 3.8% in furious trading after announcing that Jana Partners and SAC Capital Advisors, which have disclosed owning around 8.4% of the company with the intention of acquiring additional shares worth more than $600 million, want Ameritrade immediately to pursue a merger with another broker. The firms specifically named E*Trade and Charles Schwab (SCHW - Get Report) as possibilities.
The firms also stressed that they wish to avoid "interference" by 40% shareholder Toronto-Dominion Bank (TD), which they say "may be standing in the way" of such a merger.Ameritrade gained 76 cents to $20.71, and E*Trade traded heavily to jump 7.3% at $25.60. Charles Schwab lost 1.1%, and Toronto-Dominion -- a member of the NYSE Financial Sector Index -- gave up 0.7%. The index sank 0.9%, or 84.93 points, to 9825.97. But another component of the index, subprime-mortgage lender NovaStar Financial (NFI), continued rising today following Tuesday's announcement that the Kansas City, Mo., firm had securitized $1.4 billion in nonconforming mortgage assets. Shares bounced 11% to $9.10. The KBW Bank Index, which tracks large banks, fell 0.9% to 115.36. As for individual names on the losing side, United Fire & Casualty (UFCS - Get Report) slid 3.1% to $37.71 after A.G. Edwards cut the Iowa-based insurer to hold from buy, and Prudential Financial (PRU - Get Report) shed 1.1% to $99.46 on word the New Jersey life insurer is shutting down its equity-research business, Prudential Equity Group. Elsewhere, shares of Hilb Rogal & Hobbs (HRH) slouched after the Virginia-based insurance broker agreed to buy Charlton Manley, a Kansas-based company that mainly operates as an insurance agency. Hilb Rogal was off 11 cents to $43.71.