Thursday's Financial Winners & Losers

Financial stocks generally underperformed the broad indices as credit-market vexations, the old story, continued pervading the air.

Merrill Lynch (MER Quote) confirmed after the market close yesterday that it had indeed culled CEO John Thain from NYSE Euronext (NYX Quote) to take the reins at the beleaguered New York broker. News of the CEO appointment, which will take effect on Dec. 1, broke during the trading day yesterday. Credit Suisse upped Merrill to outperform.

It is hoped that Thain will, among other things, help to heal Merrill's damaged culture following Stan O'Neal's five-year stint at the top. O'Neal was pushed out a couple of weeks ago following Merrill's report of big third-quarter writedowns, as well as his unilateral decision to contact Wachovia (WB Quote) head Ken Thomson in order to suggest a merger.

Merrill shares were off 1.7% to $56.97 after a brief foray into positive territory, and NYSE lost 2% to $85.01. Wachovia was recently down 2.6%.

Shares of NovaStar Financial (NFI Quote), meanwhile, took a nose dive after it reported losing $408.1 million from continuing operations, or $43.99 a share, in the third quarter. That reverses last year's $1.81 per-share profit. NovaStar also believes there's a "high likelihood" it will be expelled from the NYSE following a Dec. 5 review, at NovaStar's request, of that previously announced determination.

The Kansas City, Mo., firm had been among numerous subprime-mortgage lenders caught in the first wave of credit-market turmoil earlier this year, and its stock has lost a tremendous amount of value over the past few months. Today, shares surrendered nearly another 60% to $1.84.