Wednesday's Financial Winners & Losers

Updated from 2:54 p.m. EDT with new stock prices

Bad vibes at Merrill Lynch (MER Quote) and a depressing home-sales report pervaded the financial sector to render Wednesday's session a decidedly bearish one.

Merrill posted a third-quarter loss of $2.85 a share from continuing operations, or $2.31 billion, to reverse last year's $1.97-per-share profit (excluding items) -- much worse than the up-to-50-cents prediction the New York broker originally issued earlier this month. Revenue took a 94% nose dive from last year to $577 million, and the firm recorded $7.9 billion in writedowns from its positions in collateral debt obligations and subprime mortgages. The latter item is about 76% higher than the initial projection.

Thomson Financial's estimates called for a loss of 45 cents a share on revenue of $3.25 billion. Standard & Poor's lowered Merrill's counterparty credit rating to A-plus from AA-minus on the heels of these results, and Fitch Ratings also downgraded the broker. Shares tumbled 5.81% to $63.22. ...