Updated from 3:06 p.m. ET
Financial stocks slumped Friday, led by
steep decline following a revamping of the government's preferred equity stake.
on Friday said it had reached a deal with the government, in which the government will match -- up to $25 billion -- private investors in converting preferred shares into common stock.
The move led to some speculation that
Bank of America
could also eventually work out such a deal.
Citi shares fell 39% to $1.50. BofA shares were off 25.8% to $3.95.
shares fell 16% to $12.10, after the company said it is suspended bonus payments to five top executives, including CEO John Stumpf, because performance goals were not met in 2008.
The NYSE Financial Sector Index was falling 2.4% to 2,518.
also is talking to the government about revisions to its bailout package, other insurers were not so lucky. Shares of life insurers tumbled after Standard & Poor's Ratings Services cut its credit ratings on numerous companies, saying the troubled economy is putting increased pressure on their assets.
Among the companies that saw their ratings cut were
, which fell 23.1% to $18.46;
Hartford Financial Services Group
, which was off 14.8% to $6.10;
, which shed 13% to $16.41; and
, which was off 22% to $1.21.
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