Banks and financial companies generally traded lower Wednesday as investors remained skittish about the ultimate fate of the government's $700 billion plan to heal the markets.
The KBW Bank index was lower by 1.6%, and the NYSE Financial Sector index slipped 0.2%. The Amex Securities Broker/Dealer index was off 0.8%.
Among individual stocks,
sank 34% after signing a definitive pact with the
Bank of New York for a two-year, $85 billion revolving credit facility. Also potentially pressuring the shares was a published report stating that the FBI is probing the situation surrounding AIG,
, the four firms whose troubles led to the bailout proposal.
Freddie and Fannie had big gains though, jumping 43% and 33%, respectively.
was up 6.4% after getting
to agree to invest up to $10 billion in the bank and saying it would sell $5 billion in stock through a public offering.
wasn't nearly as fortunate, slumping 29% on word that S&P cut its creditworthiness rating to an even deeper junk level.
Bank of New York Mellon
said it will take a charge of about $425 million in the third quarter to protect client holdings in money market mutual funds, cash sweep funds and similar collective funds that were affected by Lehman's bankruptcy filing. Shares were up 2.3%.
edged down 0.3% following the insurer's decision to reveal its exposure to various financial companies. The company said its holdings in
Bank of America
, Goldman Sachs, Lehman,
, Washington Mutual, Fannie Mae and Freddie Mac represent only about 2% of its investments.
was also in the news, but it gave back 2.3% after reaffirming its 2008 financial expectations and saying it would offer 14 million common shares.
This article was written by a staff member of TheStreet.com.