Financial Winners & Losers: UBS

The troubled Swiss bank sees more losses tied to U.S. mortgages in the second quarter.
By Debra Borchardt ,

Finanical stocks treaded water Tuesday as

UBS

(UBS) - Get Report

warned of further losses tied to the U.S. housing market.

In a prospectus for a share sale, the Swiss bank noted that it may have to record losses in the second quarter, after a first quarter in which the bank lost 11.5 billion Swiss francs and wrote down $19.5 billion tied to U.S. real estate and structured credit. The stock tumbled 6.4% to $25.24 in recent trading on the

New York Stock Exchange

.

Meanwhile, other investment banks fought back after equity analysts cut their earnings outlooks. Bank of America and Sanford Bernstein both lowered projections for

Lehman Brothers

(LEH)

,

Morgan Stanley

(MS) - Get Report

and

Goldman Sachs

(GS) - Get Report

, citing the risk of further asset writedowns. Lehman jumped 79 cents to $36.90, Morgan rose 49 cents to $42.32 and Goldman was adding $1.42 to $174.06.

The

NYSE Financial Sector

index bounced around for the day, starting out positive, losing ground and then slowing creeping back in the afternoon. It recently was adding 17.47 at 7,304.89.

The Office of Thrift Supervision said thrifts set aside a record $7.6 billion to cover losses on problem loans in the first quarter as they work to counteract the damage caused by the housing market's downturn. The agency regulates major lenders like

Washington Mutual

(WM) - Get Report

and

Sovereign Bancorp

(SOV)

. Both banks advanced on comments from the director that stability was returning to the marketplace. WaMu gained 37 cents to $9.53 and Sovereign added 15 cents to $8.66.

Over the weekend, money manager Sy Jacobs expressed concern about home equity loans at

Wells Fargo

(WFC) - Get Report

and Alt-A mortgages and construction loans at

BB&T

(BBT) - Get Report

. Wells Fargo shares slid seven cents to $27.16. BB&T's stock tumbled 1.5% to $32.24.

Another bank under pressure on the day was

Colonial BancGroup

(CNB)

, which saw shares slide 5.3% to $6.04. An RBC Capital Markets analyst identified Colonial as a bank with potential to fail due to rising problem assets. San Francisco-based

UCBH

(UCBH)

bank also hit the list and declined 5.8% to $5.19 as a result.

Bank of America

(BAC) - Get Report

was relatively flat after saying it plans to raise its stake in China Construction Bank Corp to roughly 11%. The banking giant climbed fractionally to $34.21.

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