Bank of America: Financial Winners and Losers

(Updated with closing stock prices)

NEW YORK (TheStreet) -- A handful of financial stocks got a boost upon the disclosure that a hedge fund manager doubled down on his banking bets.

Hedge fund manager John Paulson increased his holdings in Bank of America (BAC), Goldman Sachs (GS) and Regions Financial (RF). The fund is now the fourth largest shareholder in BofA, which is its second largest holding next to the Gold ETF (GLD). Paulson proved his acumen last year, as some of his funds racked up gains of 24% and 37%, when competitors suffered losses in that amount. BofA shares ended the day with a strong gain of $1.07, or 6.7%, to $17.

Regions shares also rose, as its stock climbed 38 cents, 7.8% to $5.20. Paulson is now the second largest shareholder in the Birmingham, Ala., bank. Goldman Sachs shares enjoyed a lift as well, adding 72 cents to close at $164.48.

The NYSE Financial Sector index finished the afternoon up 85.34 to 4,676.02 and the SPDR KBW Bank ETF (KBE)also stayed green as it added 2.9% to reach $22.70.

CIT Group (CIT) must submit a plan on how it intends to maintain sufficient capital and improve its overall financial condition to the Federal Reserve Bank of New York within 75 days. The news, however, soothed investors, after the company had in recent days warned it may have to file for bankruptcy if a restructuring plan with bondholders failed. Shares gained 13.2% to $1.45.

Assured Guaranty (AGO) shares ended up 7.9% to close at $18.08 after a JPMorgan analyst upgraded the bond insurer to overweight form neutral. The analyst reviewed the mortgage portfolio and felt that the losses were manageable even though it will need to add $745 million in reserves to cover them. However, the analyst thinks the premiums earned will cover that amount.