Thursday's Financial Winners & Losers

More sour news piled on financial stocks Thursday to cram the sector ever further into negative territory.

Bear Stearns (BSC) was among the volume leaders after the New York broker said that $1.9 billion in mortgage-related writedowns disintegrated its bottom line to a loss of $878 million, or $6.90 a share, in the fiscal fourth quarter. Just last month, CFO Sam Molinaro had pegged the writedowns at just $1.2 billion, though he has also proved prescient in adding, "[I] don't want to predict that things couldn't get worse, because things keep surprising."

The report came a day after Britain's Barclays (BCS) sued Bear over one of its troubled subprime-focused hedge funds, according to several published reports. Bear shares, following some mixed trading, were recently losing 1.6% at $89.20.

Bond insurer MBIA (MBI) fared much worse, with shares tanking more than 24% on a crushing disclosure. The Armonk, N.Y., firm said it has $8.14 billion in exposure to collateralized debt obligations (CDOs) backed by high-grade collateral, 85% of which consists of other CDOs -- in other words, CDOs backed by other CDOs, or CDO squareds. A Morgan Stanley analyst said he was "shocked" at the lateness of this revelation.

Run-of-the-mill CDOs, in and of themselves, have become exceedingly risky amid the deteriorating credit market. In total, MBIA's CDO exposure totals $30.61 billion.