Wednesday's Financial Winners & Losers

Updated from 2:27 p.m. EDT

Financial stocks largely dragged beneath the broader market Wednesday despite surging names such as Chittenden (CHZ Quote).

Shares of the Burlington, Vt., bank shot up 24.5% to $35.15 after People's United Financial (PBCT Quote) agreed to buy it for around $1.9 billion in cash and stock, or $37 a share (based on People's United shares' prior three-day average on June 25) -- a 31% premium to Chittenden's latest closing price. The deal should close in the first quarter of 2008. People's United expects immediate accretion to earnings, but its shares still slid 2.9% to $18.17.

Bear Stearns (BSC Quote) climbed after saying that, due to asset sales, it will take only $1.6 billion to bail out one of its struggling hedge funds, as compared with the prior estimate for double that amount. Bear doesn't believe, moreover, that it will need to sink funds into the other troubled hedge fund in question. Shares closed up $3.96, or 2.8%, to $143.31.

Tax preparer H&R Block (HRB Quote), meanwhile, jumped 4.6% to $23.02 after 1.9% holder Breeden Partners said it will nominate three candidates for election to the company board. The investment-fund manager said it intends to supply "fresh perspectives and new energy ... to tackle the company's problems" that have resulted in "substantial lost shareholder value" over the past few years.

Arch Capital (ACGL Quote), a Bermuda-based insurer, got a Credit Suisse upgrade to outperform on valuation, pushing shares 2.6% higher to $73.33.