Friday's Financial Winners & Losers

The financial sector took a familiar, languid dip under water amid a smattering of mixed news on Friday: the NYSE Financial Sector Index was hemmed in with the major averages, recently losing 54.12 points, or 0.7%, to 7,350.17.

Bond insurers were headlining again today after Financial Guarantee Insurance declared its intention to split the solid parts of its business from the rotten ones -- that is, municipal bonds vs. those tied to risky structured finance securities -- according to New York state Insurance Superintendant Eric Dinallo, who made a suggestion to that effect on Capitol Hill yesterday. "We cannot allow the millions of individual Americans who invested in what was a low-risk investment lose money because of subprime excesses," Dinallo had declared yesterday. Governor Eliot Spitzer, for his part, had warned that "if we do not take action, this could be a financial tsunami that causes substantial damage throughout our economy."

FGIC's move came a day after Moody's cut its rating to A3, down six notches from the crucial triple-A rating that bond insurers must retain in order to run their collective business. Struggling rivals MBIA (MBI) and Ambac (ABK), the rankings of which are also in peril at the major credit-ratings agencies, remained quiet today as their shares took respective slides of 5.6% and 5%.

Cypress Group is among FGIC's investors along with fellow private equity firm Blackstone (BX) -- lately down 0.9% at $16.68 -- and mortgage investor PMI (PMI), which was down by 1.2% at $7.26. ...