Financial Winners & Losers: Sovereign

Financial stocks soared Tuesday, as investor confidence that a government rescue plan for the financial sector would eventually get through Congress.

The Dow Jones Industrial Average was up more than 400 points in recent trading, a day after losing almost 800 points in the wake of the House of Representatives' stunning rejection of a $700 billion plan to buy up toxic assets clogging banks' balance sheets and the credit markets. The NYSE Financial Sector Index was up 363.59 to 5,937.78.

Wachovia Bank (WB Quote - Cramer on WB - Stock Picks) shares were among the biggest winners. The stock soared more than 90% to $3.49 as Citigroup (C Quote - Cramer on C - Stock Picks) expressed its commitment to its $2.16 billion deal to buy the ailing bank, announced before the failure of the bailout package. Citi shares were jumping 17.4% to $20.83.

Sovereign Bancorp (SOV Quote - Cramer on SOV - Stock Picks) shares also nearly doubled, adding 86.9% to $4.36, after it named Paul Perrault to replace Joseph Campanelli as CEO. The move is effective Jan. 3.

A number of regional banks laden with shaky debt were also beneficiaries of the renewed optimism for the rescue plan. National City (NCC Quote - Cramer on NCC - Stock Picks), First Horizon (FHN Quote - Cramer on FHN - Stock Picks) and Fifth Third (FITB Quote - Cramer on FITB - Stock Picks) shares all were adding more than 30%.

One big loser in the financial sector Tuesday was Hartford Financial Services Group (HIG Quote - Cramer on HIG - Stock Picks), after Fitch Ratings on late Monday lowered its outlook on the insurer to negative from stable. The ratings agency cited a decline in capital levels and earnings. Hartford will report third-quarter results on Oct. 29. Shares slid 24% to $37.99.