Wednesday's Financial Winners & Losers

Updated from 1:24 p.m. EDT

A day after the Federal Reserve's half-point interest-rate cut, financial stocks continued to swoon, rocketing out of the gate before cooling off by late morning Wednesday.

The NYSE Financial Sector Index gained 0.9% to 9295.54, as several of its mortgage-concern components bounced higher than most.

Lenders Countrywide Financial (CFC Quote), Fremont General (FMT Quote) and IndyMac (IMB Quote) climbed 3.3%, 7% and 4.1%, respectively; and mortgage insurer MGIC Investment (MTG Quote) added 4.3%.

Subprime lender Accredited Home Lenders (LEND Quote) catapulted 18.2% after finally reaching an amended merger agreement with Lone Star. The private-equity firm will pay $11.75 a share in cash for Accredited -- just shy of the midpoint between Lone Star's revised $8.50 offer last month and its initial $15.10 bid in June. Accredited will also get $49 million in financing from Lone Star, $34 million of which will go to paying off debt.

The per-share price represents a 20% premium to Accredited's latest close. The agreement also brings to an end a legal stalemate stemming from Lone Star's unwillingness to close the original deal after Accredited was battered by the subprime market's total collapse. The related lawsuit will be stayed immediately and, on receipt of the takeout payment, dismissed. Shares of the San Diego-based firm surged $1.78 to $11.56.

Lender CIT (CIT Quote) also got a lift after agreeing to sell between $3.5 billion and $4.2 billion worth of "AAA-rated" mortgage-backed securities to Freddie Mac (FRE Quote) in a deal that should close later this month. A rating-agency review will determine the exact amount. Shares of New York-based CIT gained $1.06, or 2.6%, to $41.89. Freddie Mac was up 2.8%.