Friday's Financial Winners & Losers

Updated from 12:37 p.m. EDT

Financial stocks were mixed in relatively light trading Friday as the extraordinary Week of the Rate Cut wound down.

Among the winners was Californian insurer PMI (PMI Quote), which was upped to outperform at Piper Jaffray. Shares gained 2% to close at $33.12, in support of the NYSE Financial Sector Index, which was up 26.7 points, or 0.3%, to 9219.63.

Also propping up the tracker were NYSE Euronext (NYX Quote), up 5.3% to $76.05; specialist firm LaBranche (LAB Quote), up 9.4% to $5.13; and broker Goldman Sachs (GS Quote), which tacked on 3.2% to close at $209.98 a day after issuing better-than-expected third-quarter earnings.

But one of the sector's biggest price gainers was RTW (RTWI Quote), a small Minnesota-based insurer. Shares rocketed nearly 50% after Rockhill Holding agreed to buy it for $12.45 a share in cash -- a 53.7% premium to its latest closing price. The deal, valued at around $67.6 million, should close at or before year-end. Shares were up $3.90 to $12.

On the losing side, the KBW Bank Index felt some pressure after Merrill Lynch said the banking-sector rebound will be "modest and short-lived," projecting that the sector will underperform the S&P 500 through early 2008 as bank-credit quality continues to deteriorate "significantly" through next year. The KBW tracker was down 0.2% at 108.48.

Merrill specifically downgraded KBW tracker members Regions Financial (RF Quote), KeyCorp (KEY Quote) and Wells Fargo (WFC Quote), slapping sell stickers on the former two and lowering Wells to neutral from buy. The banks eased 2.8%, 1.4%, and 0.9%, respectively.