topped financial news Thursday after the firm removed two top executives, but the bank's bad day wasn't enough to pull down the financial sector.
Lehman removed CFO Erin Callan and COO Joseph Gregory from their positions. The executives took the fall after having insisted there was no need to raise capital and then turning around and doing just that. The firm's credibility on the Street was damaged as a result and it seemed the only way to get past it was to push the executives out. Callan will remain with the company, but on the investment banking side. The stock ended down 4.4% at $22.70.
Another big loser for the day was
, which tumbled 23.7% to $11.98 after announcing it would need to raise capital. The Cleveland-based bank received an adverse ruling in a court case regarding the tax treatment of a lease transaction. The result is an expected charge in the quarter and a reduction of its dividend. The bank has increased its dividend for the past 43 years, and unhappy shareholders promptly sold the stock.
of $3.31 billion, or $20.64 a share, for the first quarter, vs. net income of 62 cents a share in the previous year. The lender known for its large mortgage customers blamed fair value accounting for the losses and insisted its portfolio was performing well. The stock was only down four cents to 68 cents, but percentage wise a loss of 5%.
But the negative headlines did not pull down the overall group as the NYSE Financial Sector index advanced 1.4% to 6,786.86.
One big mover was
, which shot up 20.5% to $5.23 after a Sandler O'Neill analyst upgraded the stock to buy from hold. The analyst believes this Cleveland bank has ample capital to get through the credit dislocations in the market.
knows when to fold 'em and decided to dissolve the hedge fund that CEO Vikram Pandit created. The Old Lane Partners fund was picked up by Citi before Pandit came on as CEO, but since that time, the fund suffered from flat returns and investors had to be bailed out. The decision to close the fund was no surprise to the market, and the stock moved up 3.5% to $19.89.
Bank of America
ticked up as well after reporting that it has more than 1 million customers using its mobile-banking service. The bank also launched a new credit card with Virgin Atlantic. Shares of the big bank rose 2.1% to $29.44.
And finally, bond insurers
posted a positive day for a change. MBIA was up nearly 18% at one point but gave most of it back in the afternoon, endign the dayt at $5.31, a gain of 9.5%.
Ambac had climbed 11%, but also pulled back, to end the day with a 6.3% gain at $2.02. MBIA Chief Executive Jay Brown said the company was interested in creating a new public finance business and had received "a wide variety of third-party interest in providing capital directly to such a 'Newco'."