Financial Winners & Losers: Freddie Mac

Troubled mortgage lender Freddie Mac (FRE Quote) delivered terrible losses for the second quarter placing a pall over the financial sector.

Freddie lost $821 million for the quarter compared to a $729 million profit for the same quarter last year. Revenue slumped to $1.69 billion from $2.34 billion. The lender also set aside $2.5 billion in reserves for expected mortgage delinquencies and foreclosures. The stock plunged 18.3% to $6.57. Fellow government-sponsored lender Fannie Mae(FNM Quote) reports results on Friday and tumbled 14.4% to $11.64.

Merrill Lynch(MER Quote) declined in early trading but then rallied in the afternoon even after analysts slammed the company with negative comments. A Deutsche Bank analyst lowered his profit forecast to $2.30 a share from $2.45 and kept his hold rating. A Bernstein analyst suggested that the company should cut its dividend in light of the additional shares the company has issued. He calculated that Merrill would be on the hook for $2.85 billion in dividends if it didn't reduce the amount. The stock was recently trading down fractionally to $28.08. Protective Life(PL Quote) shares gave back 10.2% to trade at $34.18 after the insurance and investment product provide lowered its guidance for the year and cited the difficult macroeconomic environment for cars and boats.

Overall the NYSE Financial Sector Index was recently dropping 72.84 to 6,606.79.

But there were several stocks that were bucking the trend. Nasdaq(NDAQ Quote) shares swelled 17.6% to $31.07 after it reported profits increased 81%, driven by the exchange's expansion through several major acquisitions over the past year. Core trading volumes have been slowing and the company has been pushing itself into global markets and creating proprietary products.