Wednesday's Financial Winners & Losers

Financial stocks started the day in the red as the market digested data pointing to higher inflation and fewer mortgage applications, but ultimately clawed their way back.

Investors were greeted Wednesday morning with the Labor Department reporting that the Consumer Price Index rose 0.4%, while analysts had expected the rise to be 0.3%. Food prices jumped the largest amount in eleven months. Not surprisingly, applications for new mortgages dropped 22.6% during the week ending Feb. 15 as most interest rates moved higher, according to the Mortgage Bankers Association's weekly application survey.

A plan to buoy some bond insurers, at the center of the credit and housing storms of late, may have helped lift financial stocks and the wider market. MBIA (MBI Quote) and Ambac (ABK Quote) were enjoying gains after hedge fund activist Bill Ackman floated a plan to New York state Insurance Superintendent Eric Dinallo that would keep large bond insurers businesses intact. MBIA closed up 4.1% to $12.18, while Ambac's price ended flat at $9.94. ...