Friday's Financial Winners & Losers

Updated from 2:44 p.m. EST with new stock prices

Financial-stock traders were generally staying on the sidelines Friday as the trampled sector offered up a mixed bag of news.

The NYSE Financial Sector Index was recently off 133.17 points, or 1.8%, to 7,464.53, and the Amex Securities Broker-Dealer Index shed 0.9% to 194.74.

Helping to weigh on both sector trackers was Merrill Lynch (MER Quote), which lost 2.7% to $52.19. The Wall Street Journal reported that the Justice Department has tapped the Securities and Exchange Commission for information it's collecting on Merrill, which stands as one of the most aggrieved brokerage giants from the still-ongoing subprime mess.

Security Capital Assurance (SCA Quote) continued falling a day after credit-ratings firm Moody's slashed the bond insurer's rating to A3 from Aaa, as per the Associated Press. Fitch Ratings hit the firm with a similarly harsh downgrade of its vital triple-A rating a couple of weeks ago. Shares slid 60 cents, or 23.1%, to $2.00.

Meanwhile, First Horizon (FHN Quote) canceled its September agreement to sell nine of its Atlanta branches to Fifth Third Bancorp (FITB Quote) on the very day that the deal was supposed to close. Memphis-based First Horizon said the pair "had not reached agreement concerning a key term of the contract." But Fifth Third, of Cincinnati, said it "considers this to be an unjustified breach of the agreement ... and will seek all available legal remedies."

First Horizon's deal to sell ten of its Dallas/Forth Worth Branches to Sterling Bancshares (SBIB Quote) remains on schedule to close today. First Horizon shares were down 76 cents, or 4%, to $18.48. Fifth Third gave up 2.7% at $25.67.

Elsewhere, Centene (CNC Quote), a St. Louis-based health insurer, tanked 13.8% after reporting fourth-quarter earnings of $7.3 million, or 20 cents a share, excluding restructuring charges. Analysts polled by Thomson Financial were looking for 48 cents a share. Shares were sinking $3.25 to $21.42.

On the other hand, a few names garnered positive analyst research Friday, among them credit-card company MasterCard (MA Quote). Stifel Nicolaus analyst Chris Brendler upped the stock to buy from hold today, saying he's "less concerned about recession risk" at MasterCard "than consensus appears to be forecasting." He believes that, "should a global slowdown materialize," the company "is prepared to dial back on discretionary expenses." He also pointed to MasterCard's recent fourth-quarter earnings beat and "confidence in [its] ability to continue to raise revenue margins." MasterCard shares were up 2.4% to $205.61.

Citigroup upped Moody's (MCO Quote) to buy from hold, citing valuation and a positive earnings outlook despite likely forthcoming regulatory bumps down the road, according to Marketwatch. And online broker optionsXpress (OXPS Quote) got a bump to outperform at BMO Capital Markets. Moody's shares started out higher but slipped 2.6% to $36.04; optionsXpress added 2.3% to $25.02.

And MBIA (MBI Quote) saw jumpy trading around the flat line after the struggling bond insurer upped its equity offering by one-third to $1 billion. This is being done in hopes of maintaining triple-A ranking at the major credit-rating firms, all of which have MBIA on review for downgrade. The Armonk, N.Y., company, which announced its original $750 million offering on Wednesday after the close, is now pricing 82.3 million shares at $12.15 apiece. The underwriters will have an overallotment option for another 12.3 million shares.

Warburg Pincus, which had agreed to backstop the offering, plans on waiving its right to buy $300 million in convertible preferred shares. It is, however, picking up $300 million worth of common shares following its December equity-purchase agreement to infuse MBIA with up to $1 billion in cash. MBIA moreover said it doesn't intend on using Warburg's backstop on this offering.

MBIA shares were up 40 cents, or 2.8%, to $14.60 in recent trading.