Financial Stocks in Motion

XL Capital(XL Quote) was up 2.5% after the Bermuda-based insurance company said it expected losses relating to Hurricane Katrina to be about 1.75% of the industry loss, which the company said is consistent with its expectations. Brian M. O'Hara, president and chief executive, said the company still anticipated an operating profit for the year, barring any other significant similar events. Also Morgan Stanley upgraded the company's stock from equal-weight to overweight. Shares of XL Capital were up $1.74 to $70.53.

Everest Re(RE Quote) rose 2% after the Bermuda-based reinsurance company said it expected to turn a profit this year, even though its losses from Hurricane Katrina could amount to about 1% of the total industry losses. The company also said it expected capital growth in December. Joseph V. Taranto, the company's chief executive, said that the impact of Hurricane Katrina "is within our risk-management tolerance and does not change our positioning or underlying fundamental financial strength." Shares of Everest were up $1.86 to $96.36.

Mercury General(MCY Quote) fell 1% after Citigroup downgraded the Los Angeles-based insurance company from buy to hold. Citi said it continued "to believe that the company's dividend yield makes it an attractive core holding for strictly income-orientated investors." The bank also said that Mercury General could see some near-term minor price appreciation relating to its lack of exposure to Hurricane Katrina. Shares of Mercury General were down 57 cents to $59.15. ...