Updated from 2:59 p.m. EDT
Financial stocks struggled to find footing early Monday as the subprime crisis continued to cast a long shadow, though the sector gained some upward momentum along with the major indices come afternoon.
The lately ravaged shares of American Home Mortgage Investment (AHM) took another slide -- down 36.7% to 44 cents -- after the mortgage lender officially announced it has declared bankruptcy.J.P. Morgan cut Luminent Mortgage Capital (LUM) to underweight, saying it has too much exposure to the residential-mortgage market, after which shares fell 30.8% to $4.38 before trading on the stock was halted. Impac Mortgage (IMH - Get Report) lost 15.1% earlier in the day on a Deutsche Securities downgrade to hold from buy but closed up 2.4% to $1.70. NovaStar Financial (NFI) took a nosedive below the $5 mark earlier today after a Friedman Billings analyst predicted that the subprime lender will eventually shut down, citing its Friday announcement that it will