Thursday's Financial Winners & Losers

Financial stocks opened higher Thursday, but the rally that started the day before quickly died as the Philadelphia Federal Reserve Bank unexpectedly reported the biggest contraction in the region's manufacturing sector in seven years.

The Philly Fed report lends credence to those who believe the economy is in danger of falling into recession. While this bolsters the market's expectation of rate cuts from the central bank, stocks did not respond favorably. The NYSE Financial Sector Index, which spent most of the day in negative territory, more recently was losing 78.67 to 7,432.02.

Private banking and investment management firm Boston Private Financial Holdings(BPFH Quote) was down 26.4% on the announcement that its affiliate, First Private Bank & Trust, increased its loan-loss reserves between $16 million and $19 million for the quarter ending Dec. 31. The increased reserves are due to potential losses in First Private's portfolio of residential construction and land loans in Southern California, The increased provision is expected to cut the company's earnings by between 27 cents and 31 cents per share. ...