Tuesday's Financial Winners & Losers

Financial stocks were generally hemmed in with the mildly buoyant Dow Jones Industrial Average and S&P 500, amid mixed smatterings of news on Tuesday.

Struggling bond insurer Ambac (ABK Quote) was a big winner, lately surging by more than 16%, after JPMorgan Chase (JPM Quote) disclosed that it had bought about another 2 million Ambac shares over the course of 2007. The bank increased its stake in the company to 7.7%. As of year-end 2006, JPMorgan's Ambac holdings had stood at 5.4%.

Ambac shares were leaping $1.79 to $12.92; JPMorgan was recently adding 1.2% to $46.75.

Countrywide Financial(CFC Quote) reported swinging to a fourth-quarter loss of $422 million, or 79 cents a share, from a year-earlier profit of $1.01 a share. The mortgage lender cited a $924 million credit-loss provision -- up more than twelvefold from last year, though slightly under the prior quarter -- as well as $831 million in impairment to "credit-sensitive" residuals.

The results widely miss Wall Street's call for a loss of 30 cents a share, per Thomson Financial. Still, they're a huge improvement from the third quarter's $2.85 shortfall. Furthermore, Bank of America (BAC Quote) CEO Ken Lewis, at the Citigroup Financial Services Conference in New York Tuesday, said that "everything is a go" regarding BofA's agreement to buy Countrywide.

Countrywide added 6.2% to $6.32 as BofA stock rose 1.5%.

Credit-card company American Express (AXP Quote) posted fourth-quarter continuing-operations income of $839 million, or 71 cents a share, meeting its own slashed targets, as well as those of analysts. Shares ticked up a dime to $47.50.

Also in the fourth quarter, Massachusetts-based Hanover Insurance's (THG Quote) income vaulted 66.6% year over year to $75.8 million, or $1.44 a share. Fellow insurer Unum Group (UNM Quote), of Tennessee, saw climbing adjusted earnings of 59 cents a share that beat projections by a nickel. Shares recently jumped 8.6% and 5.7%, respectively.

Elsewhere, real estate investment trust Quadra Realty Trust (QRR Quote) leapt by roughly one-third to $10.62 after Hypo Real Estate agreed to buy all of the Quadra shares it doesn't already own -- 65.3% of the company -- for $10.6506 a share in cash. Quadra also plans on declaring a dividend of 34.94 cents a share, meaning investors will get a total of $11 a share. The company's last quarterly dividend was for just 19 cents a share. The buyout should close in March.

The NYSE Financial Sector Index was up 0.4% to 7,868.02, and the Amex Securities Broker-Dealer Index added 0.7%.

On the flip side, New York Community Bancorp (NYB Quote) reported that fourth-quarter operating earnings stayed essentially flat with last year at 21 cents a share, missing Wall Street expectations by 2 cents, and California's East West Bancorp (EWBC Quote) likewise shot below the mark for that quarter. Shares were off 1.2% to $17.58 and 4.8% to $23.70, respectively.

Online broker optionsXpress (OXPS Quote), meanwhile, lost 7.2% to $27.57 despite a 44.2% income leap to $28 million, or 44 cents a share, that topped by a penny a share.

Investment manager Waddell & Reed (WDR Quote) was flush with Wall Street estimates, and T. Rowe Price (TROW Quote) beat them comfortably, but shares were still down 0.1% and 0.5%, respectively.

Away from earnings, Legg Mason (LM Quote) has named company veteran Mark Fetting its new CEO. He replaces co-founder Raymond "Chip" Mason, who will now serve as nonexecutive chairman. Shares were down $1.24, or $1.7%, to $70.81.