Wednesday's Winners & Losers: Nortel Networks

Nortel Networks(NT Quote) was up $1.27, or 12.3%, to $11.60 on reports that it will form a joint venture with Motorola(MOT Quote) that would combine their wireless network infrastructure divisions.

Milwaukee-based mortgage insurer MGIC (MTG Quote) announced a big fourth-quarter shortfall, losing $1.47 billion, or $18.17 a share, thanks largely to soured bulk transactions in which home-equity securitizations were backed by loans generally "reflect[ing] lower average FICO scores and a higher percentage of ARMs [adjustable rate mortgages]." During the quarter, MGIC stopped writing these "Wall Street" bulk transactions, or those in which MGIC knew these loans were serving as collateral, but the activities still did enough damage to necessitate a $1.2 billion premium-deficiency reserve. That sum covers expected net future losses from those transactions while also encompassing preexisting loss reserves.

A year earlier, MGIC had booked a quarterly profit of $121.5 million, or $1.47 a share. Analysts were seeking a loss of just $6.77 a share before special items, according to Thomson Financial.

Also weighing down MGIC's bottom line this past quarter, but not by nearly as much as the bulk transactions, was further red ink from the firm's doomed subprime-focused joint venture with Radian (RDN Quote). The now-bankrupt investment vehicle -- called Credit-Based Asset Servicing and Securitization, or C-BASS -- cost the company another $33 million in the fourth quarter. C-BASS effectively killed the MGIC and Radian's proposed merger last year.

MGIC shares were sliding $1.78, or 12.6%, to $12.40. Former suitor Radian was down 13.5% to $7.04 ahead of Friday's scheduled earnings report, and peer PMI (PMI Quote), expected to report on Feb. 26, shed 14.3% to $7.19.

Meanwhile, Acorda Therapeutics(ACOR Quote) shares jumped 15% after the company disclosed the sale of 3.3 million shares of stock. About 83,000 of the shares are being sold by a stockholder, with the remainder sold by Acorda. The shares are being sold at $21.50 apiece, a five-cent discount to the stock's Tuesday closing price of $21.55.

Acorda will use the proceeds to finish its second late-stage clinical trial on multiple sclerosis treatment Fampridine-SR and for a regulatory filing and potential launch of the drug. Shares surged $3.15 to $24.70.

Shares of Applied Materials(AMAT Quote) jumped $1.84, or 10.2%, to $19.91, a day after the company beat analysts' estimates for the first quarter.

The company, which sells equipment for manufacturing semiconductors, flat-panel displays and solar-energy panels, said it hopes growth in the flat-panel displays and solar energy markets will offset weakness in the chip business.

For the first quarter, revenue at Applied Materials declined 8% to $2.09 billion from a year ago but met analysts' estimates of $2 billion. Net income was $262.4 million, or 19 cents a share, vs. $403 million, or 29 cents a share, the year before. Excluding certain restructuring charges, the company earned 23 cents a share, higher than Street estimates of 19 cents a share.

Shares of diagnostic company Volcano (VOLC Quote) erupted to gain 17.4% at $14.45. The Rancho Cordova, Calif.-based firm posted a 35% year-over-year increase in revenue to a record $40 million for the fourth quarter. The revenue increase contributed to non-GAAP earnings of $4.4 million, or 9 cents a share, vs. $2.3 million, or 6 cents a share, a year ago. Analysts polled by Thomson Financial were looking for a loss of 2 cents a share.

On the losing side, Daktronics (DAKT Quote), a Brookings, S.D.-based supplier of large-screen video displays, stumbled 10% to $17.54 after reporting fiscal third-quarter results. The company brought in a profit of $5.4 million, or 13 cents a share, compared with $7 million, or 17 cents a share, a year ago. Analysts were looking for 11 cents a share.