Fannie Mae: Financial Winners and Losers

(Updated with refreshed stock price moves, added Comerica and Marshall & Isley results, State Street litigation news.)

NEW YORK (TheStreet) -- Fannie Mae (FNM Quote) and Freddie Mac (FRE Quote) were among the losers of the financial sector Tuesday, extending the previous session's decline.

Fannie Mae sank 5.3% to $1.08 and Freddie Mac dropped 8.9% to $1.23 one day after Keefe, Bruyette & Woods analyst Bose George dropped the firm's price targets for both stocks to zero while downgrading the rating on each stock to underperform. The two-day loss on Fannie totals 26%, while Freddie has fallen 28% this week.

State Street (STT Quote) also lost ground after reporting quarterly earnings before the start of trading Tuesday. State Street earned $1.05 a share for the third quarter on revenue of $2.3 billion, beating the Thomson Reuters average earnings estimate by a penny.

However, State Street lowered its full-year earnings outlook to a range of $4.13 to $4.17 a share, down from the prior range of $4.25 to $4.50 a share and in line with Wall Street's consensus target of $4.16.

Additionally, reports surfaced that the California Attorney General Jerry Brown is looking to recover more than $200 million in alleged illegal overcharges and penalties from State Street due to "unconscionable fraud" against the state's pension funds CalPERS and CalSTRS. State Street denied any wrongdoing. Still, shares were falling 8.2% to $47.94.

On the other hand, shares of Bank of New York Mellon (BK Quote)was on the rise even swung to a third-quarter loss of $2.46 billion, or $2.05 a share, compared with a year-ago profit of 26 cents a share.