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Financial Winners & Losers: AIG

The insurer's terrible first quarter weighed on financial stocks.

The first quarter loss for insurance giant


(AIG) - Get American International Group, Inc. Report

spooked investors Friday and kept pressure on financial stocks.

The insurance giant plunged 8.8% to $40.28, after it reported a $7.8 billion first-quarter loss Thursday after the bell, its second straight loss in a row. Placing the blame on credit markets, AIG said it would raise $12.5 billion in capital in the next few months.

FBL Financial Group

(FFG) - Get FBL Financial Group, Inc. Class A Report

was another big loser among insurers, crumbling 16.2% to $22.99 after it recorded a jump in losses blamed on six securities.


(C) - Get Citigroup Inc. Report

declined 2.8% to $23.63 when CEO Vikram Pandit said the bank would shed between $400 billion and $500 billion of its $2.2 trillion in assets. Pandit said he'll shed ``legacy assets,'' including real estate holdings and collateralized debt obligations, such as bonds backed pools of subprime mortgages. Analysts suggest he may unload life insurer Primerica as well.


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Financial Sector Index tumbled 71.14 to 7,583.36.

H&R Block

(HRB) - Get H&R Block, Inc. Report

shares jumped 7.8% after the Office of Thrift Supervision that reversed its requirement that the tax preparer hold a 3% capital reserve. The company's sale of its Option One Mortgage unit and its lower risk profile gave comfort to regulators. The stock gained $1.71 to $23.57.

One insurance company that had a positive quarter was

Allied World Assurance


, which came in with a higher first quarter profit of $130 million, vs. the previous year's $113 million profit. The Bermuda-based insurance and reinsurance company's shares shot up 7.8% to $43.87.

And finally,

Sovereign Bancorp


shares rose on a rumor that it would raise up to $2 billion in an attempt to offset losses on bad loans. A Keefe Bruyette analyst upgraded the stock to market perform, but cut his estimates. Shares of Sovereign rose 5.4% to $7.86.