Updated from 12:23 p.m. ET
Financial firms were mostly falling along with the major averages Wednesday, as reports of increased scrutiny for
(C - Get Report)
(MS - Get Report)
fourth-quarter loss contributed to investor unease.
The KBW Bank Index closed down 1.6% at 44.98, and the Amex Securities Broker/Dealer Index gained 0.25% to 77.12.
After dipping $1.33 in early trading,
shares were off their lows, then closed up 37 cents, or 2.3%, at $16.50. The bank holding company announced a loss of $2.37 billion, or $2.34 for the fourth quarter. A year ago, Morgan Stanley lost $3.61 billion, or $3.61 a share.
Meanwhile, Citigroup, a member of the
Dow Jones Industrial Average
, was falling 4.9% to $7.83.
The Wall Street Journal
reported Wednesday that the banking behemoth was facing
additional regulatory scrutiny
in part because of its participation in the government's Troubled Asset Relief Program.
Elsewhere, a report in the
suggested that Citi would be
merging its investment and corporate banking
On the winning side,
(GS - Get Report)
added 3.7% to $78.78, building on the previous day's gains despite announcing its first loss as a public company on Tuesday.
Among regional banks, shares of
gained 2.3% to $2.25,
(RF - Get Report)
rose 0.8% to $8.77 and shares of
(ZION - Get Report)
fell 2.44% to $26.39.
JPMorgan Chase analyst Steven Alexopoulous noted that those three banks were most at risk for needing equity in the months ahead.
On the other hand, Alexopoulous noted
People's United Financial
had the highest equity levels among midcap banks.