E*Trade: Financial Winners and Losers

(Updated with final stock price moves throughout, BofA/SEC settlement news.)

NEW YORK (TheStreet) -- E*Trade Financial (ETFC Quote) shares were among the top performers of the financial sector Monday after an analyst upgraded the company's stock and said it could be acquired by a rival in the online brokerage space.

E*Trade Financial shares jumped after Citigroup analyst Keith Walsh upgraded the online investment broker to buy from hold, raising his 12-month price target to $2.30 from $1.50. Walsh said concerns have been allayed thanks to capital raising moves and a recent debt exchange.

Walsh also the possibility exists for a deal between E*Trade and competitors TD Ameritrade (AMTD Quote) and Charles Schwab (SCHW Quote).

Separately, E*Trade said it plans to sell up to $150 million of stock into the market, with proceeds to be used to boosting liquidity for working capital and other corporate purposes. Additionally, its board ended its poison-pill plan after last month's vote by shareholders, the company said. E*Trade shares rose 12 cents, or 7.2%, to close at $1.78.

Meanwhile, bank stocks were mixed after President Obama's appearance at Federal Hall on Wall Street. While the financial system remains weak, Obama said "the storms of the past two years are beginning to break."

Obama outlined his plan to unwind government involvement in the financial sector and will urge greater regulation. Saying that "the old ways that led to this crisis cannot stand," Obama said his administration's plan includes the creation of a new Consumer Financial Protection Agency, maintaining a tighter regulatory system and ending days of "too big to fail" by creating resolution authority.