Friday's Financial Winners & Losers

Financial stocks mostly rode high Friday following better-than-expected job growth despite discouraging news at both Merrill Lynch (MER Quote) and Washington Mutual (WM Quote).

Merrill shares traded up 2.5% at $76.67 even though the New York broker said that some $5.5 billion in writedowns will pressure its third-quarter results to a loss of 50 cents a share, reversing a $2 year-ago profit.

Similarly, WaMu said that the credit crunch will pull down its third-quarter profit by around 75% from last year's 77 cents a share, but the Seattle-based bank's shares still added 2.2% to $36.07. That gave legs to the KBW Bank Index, which climbed 1% to 110.50.

The NYSE Financial Sector Index, which tracks both Merrill and WaMu, was up 1.2% to 9,710.65.

Barclays (BCS Quote), meanwhile, tacked on 1.3% after the British-based bank dropped its takeout bid for ABN Amro (ABN Quote) against the competing bid from a Royal Bank of Scotland-led group.

Elsewhere in positive territory, Florida's Universal Insurance (UVE Quote) jumped 0.8% to $9.11 after upping its quarterly dividend by a penny to 9 cents a share. Janus Capital (JNS Quote) was upgraded to neutral from sell at UBS, lifting the Denver asset manager's shares by 5.3% to $32.08.

But State Street (STT Quote) lost 1.3% after The Wall Street Journal reported that Alaska and Idaho are considering suing the Boston bank over retirement-fund losses stemming from two of its "enhanced index" bond funds. The funds made aggressive and risky investments, said the Journal.