Friday's Financial Winners & Losers

Also rising sharply on this news were the lately languishing mortgage investors Freddie Mac (FRE Quote) and Fannie Mae (FNM Quote), each of which soared nearly 19%, in addition to financial guarantors and mortgage insurers.

Like all other entities exposed to the subprime mess, shares of these firms -- for example, Ambac (ABK Quote), MBIA (MBI Quote), MGIC (MTG Quote), Radian (RDN Quote), and PMI (PMI Quote) -- have suffered a calamitous few months. Today, shares leapt 8.9% or more.

Elsewhere, the Journal reported that new Merrill Lynch (MER Quote) CEO John Thain is preparing to bring in NYSE Euronext (NYX Quote) Finance Chief Nelson Chai. Per the report, talks have already entered an advanced stage, according to people familiar with the matter. Thain was recently hired from the NYSE in order to replace the ousted Stanley O'Neal.

Merrill shares closed up $2.53, or 4.4%, to $59.94; NYSE hugged the flat line for most of the day before ending fractionally higher at $86.60.

Morgan Stanley (MS Quote) also booked only lackluster gains after announcing the retirement of Co-President Zoe Cruz who, to many, had been the heir-apparent to CEO John Mack. The retirement will take effect Dec. 1. Among other simultaneously announced management changes, Walid Chammah in London and James Gorman were appointed co-presidents. Shares traded mostly in positive territory, but flirted with the flat line before ending just 0.7% higher.

Bear Stearns, meanwhile, levied downgrades on Deutsche Bank (DB Quote), UBS (UBS Quote) and Credit Suisse (CS Quote), but shares of the banks persisted upward nonetheless. Deutsche rose 1% to $131.75; UBS gained 2.3% to $50.48, and Credit Suisse ticked up 4 cents to $60.32.