Wednesday's Winners & Losers: Ambac Financial

Ambac Financial's(ABK Quote) plan to raise $1 billion through a stock offering disappointed investors hoping for a bailout, sending the financial sector and overall market plummeting Wednesday.

Ambac shares plummeted as much as 19.8% after saying it would sell $1 billion worth of its stock and $500 million in equity units in an attempt to add to its capital base to backstop losses to debt it insures. The move is designed to save its remaining triple-A credit ratings, critical for the company to win new business. More recently, the stock was down 14.2% to $9.20.

An upgrade from Morgan Stanley wasn't enough to revive mortgage lender Fannie Mae(FNM Quote). Based on the lower valuation of the stock, the analyst moved the rating to equal-weight from underweight, although the mortgage sector was cut to cautious from in-line. Freddie Mac (FRE Quote) was maintained at equal-weight and is preferred by the analyst over Fannie. Freddie was trading at $21.48 down 4.9% and Fannie fell 6.3% to $24.32.

Shares of BlackBerry maker Research In Motion(RIMM Quote) were down $3.31, or 3.2%, to $101.34. RIM's smartphone rival Apple(AAPL Quote) is expected to unveil new features aimed at business users and possibly integrate Microsoft's Exchange email client with the iPhone making it easier for users to get their email pushed on the device.

Logitech(LOGI Quote) was up 91 cents, or 3.7%, to $25.60. A Citigroup analyst initiated coverage of the stock Wednesday with a buy rating. The company is the leader in the computer peripherals business, has a good competitive position and has posted strong free cash flow growth that could stand it in good stead in times of a weak economy, said the analyst.

Shares of Packeteer (PKTR Quote), which provides wide-area network application delivery systems, rocketed 28% to $4.94 on a buyout offer. Major shareholder Elliott Associates offered $5.50 a share in cash for the Cupertino, Calif., company. The board said it is evaluating the unsolicited offer, which represents a 42% premium over Tuesday's closing price.

Maidenform Brands (MFB Quote) rose 16% to $13.97. For the fourth quarter, the Bayonne, N.J., maker of intimate apparel announced that profit, excluding certain items, nearly doubled year over year to $6.3 million, or 27 cents a share. Wall Street was expecting EPS of 20 cents.