Monday's Financial Winners & Losers

The financial sector was spinning its wheels Monday amid a mixed bag of news after Friday's confluence of share-price recoveries.

Over the weekend, reports emerged regarding the ousting of Merrill Lynch (MER Quote) CEO Stanley O'Neal following massive disclosed writedowns last week that pushed the broker to a stunning third-quarter loss. O'Neal also reportedly angered the company board by calling Wachovia (WB Quote) Chief Kennedy Thomson in order to suggest a merger.

The Wall Street Journal said the resignation would be announced by this morning, while The New York Times earlier reported that the board was united in its decision to push O'Neal out of that position. No official word has yet been issued.

After a buoyant Friday, Merrill shares saw nervy action and traded mostly in the red Monday morning. Recently, however, they were up 1.8% to $67.30.

Countrywide (CFC Quote) was on the retreat after Friedman Billings cut $5 off the mortgage lender's price target, to $15 following Friday's report of a big quarterly loss. The analyst cited continued softness in the broader housing market, notwithstanding the mortgage lender's initially share-boosting prediction that it will turn a profit next quarter and in 2008. Shares surrendered 1.9% to $16.98.

Clayton Holdings (CLAY Quote), a mortgage analytics company, plunged 15.5% to $4.63 on a couple of negative analyst notes. Standard & Poor's backed its junk rating on Clayton's debt by cutting its outlook to stable from positive, and JMP downgraded the stock to market perform from market outperform. On Friday, the Shelton, Conn., company said it swung to a surprise adjusted loss of 5 cents a share in the third quarter.