Friday's Financial Winners & Losers

Citi's not-as-bad-as-expected quarter boosted financial stocks Friday.
By Debra Borchardt ,

It was a case of bad news means good news Friday when

Citigroup

(C) - Get Report

reported a 48% drop in revenue, but still saw its shares spike along with the financial sector.

Citi reported $6 billion in writedowns in subprime and highly leveraged finance commitments, which contributed to a first quarter loss of $1.02 share, vs. a profit of $1.01 a share a year ago. However, the market had been whispering that the writedown could be as high as $22 billion. Investors shrugged off the loss and pushed the stock up 4.5% to $25.11.

The

NYSE

Financial Sector index shot up 121.77 to 7,687.46.

The resiliency of Citi helped other banks move up as well.

Wachovia

(WB) - Get Report

saw its shares climb 5.3% to $27.23 after raising $8 billion in a stock offering that was only expected to raise $7 billion. And regional bank

Zion Bancorp

(ZION) - Get Report

moved up 6.4% to $46.52.

Bank of America

(BAC) - Get Report

announced that it was leaving the private student loan business, although continuing to make loans backed by the federal government. Shares ticked up 2.9% to $38.56, a gain of $1.09. This was terrible news for

First Marblehead

(FMD)

, since Bank of America is one of its biggest customers. But like Citi, bad news did not slow the stock down and it also advanced 11.6% to $3.76.

Shares of futures and options broker

MF Global

( MF) skyrocketed 24.9% to $14.42, even though it said it will report a loss of $55 million to $65 million for the quarter. The loss was attributed to taking a bad debt provision of $141.5 million as a result of unauthorized trading by a broker in the volatile Chicago wheat market. The Bermuda-based company recorded fourth-quarter revenue that rose by at least 17% from last year on a jump in volumes.

Old news was good news for

Fannie Mae

( FNM), when Federal regulators announced a settlement on Friday with three former executives regarding their alleged roles in a 2004 multibillion-dollar accounting scandal. Former CEO Franklin Raines, ex-CFO Timothy Howard and former controller Leanne Spencer will turn over stock and options awarded during their time at the company. Shares of the nation's largest mortgage lender ticked up 30 cents to $28.55.

A

Lehman Brothers

analyst slashed his price target and profit expectations on financial services firm

CIT Group

(CIT) - Get Report

after the company reported a losing quarter Thursday. But he maintained an overweight rating and implied that the stock could double over the next year. Shares increased $1.53 to $13.50, a gain of 8%

On the flip side,

Capital One Financial

(COF) - Get Report

plunged 3.1% to $47.21 after a

Piper Jaffray

analyst dropped his rating on the consumer credit company to neutral from buy and a

Keefe Bruyette & Woods

analyst cut his rating to underperform from market perform.

And finally, regional brokerage

GFI Group

(GFIG)

plummeted 23.8% to $11.93 after announcing its credit head had resigned and warned that as many as 12 of its North American credit brokers could also be leaving. The defections were blamed on poaching by an unnamed competitor.

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