Financial Winners & Losers: Merrill Lynch - TheStreet

Financial stocks rallied Tuesday, helping to lift the broader market, with beaten-down regional banks and bond insurers among the biggest winners.

The NYSE Financial Sector index advanced 4.4%, and the KBW Bank index was up 7.3%.

Shares of

MBIA

(MBI) - Get Report

and

Ambac

( ABK) both advanced as investors crossed their fingers that more policy holders would follow

Merrill Lynch's

( MER) lead and try to

offload hard-to-sell securities

.

MBIA gained 12.4% to $4.80, and Ambac jumped 15.5% to $2.01.

Citigroup

(C) - Get Report

managed to move up as well, even though a Deutsche Bank analyst suggested it could see even more writedowns. Citigroup climbed 3% to $17.94.

Elsewhere, small-cap bank

East West Bancorp

(EWBC) - Get Report

traded in the green zone as it climbed 11% to $11.88. The California-based bank was upgraded to buy from neutral by D.A. Davidson.

Another regional bank that was enjoying a positive day was

First Horizon National

(FHN) - Get Report

, rising 10.6% to $9.29. The Memphis-based bank has lost 73% of its value over the last year and investors have been trying to pick the bottom in the stock.

American Express

(AXP) - Get Report

ticked up 3% to $36.44 after saying it would acquire 13% of corporate travel company

Concur Technologies

(CNQR)

. Both companies have exclusive deals to promote their services with each other. The deal is worth approximately $251 million.

Zions Bancorp

(ZION) - Get Report

,

Washington Mutual

(WM) - Get Report

and

Fifth Third

(FITB) - Get Report

were also stronger.

Meanwhile, a day after Merrill said it would raise $8.5 billion in new capital and sell a big portion of its collateralized-debt obligations, shares were little changed, falling 14 cents to $24.19.

XL Capital

(XL)

dropped after saying it would try to get $2.5 billion through a sale of common stock and convertible securities. Moody's also said that it was placing XL's senior debt rating on review for a potential downgrade. The stock fell 5% to $17.46.