Friday's Financial Winners & Losers

Goldman Sachs is falling.
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The financial sector was finally trailing into negative territory Friday, ending an otherworldly week in the green inspired by Tuesday's

giant rate cut by the

Federal Reserve

.

Following an initial attempt to hold onto those gains, the

NYSE

Financial Sector Index was recently sliding 164.53 points, or 2.1%, to 7,640.86.

That's thanks partly to recent declines at

Goldman Sachs

(GS) - Get Report

, which is

reviewing workers who turned in a bottom-5% performance at the New York broker, at least some of whom will be fired. Goldman stressed that, since the firm continues to hire, this likely won't amount to an actual headcount reduction.

Goldman shares were initially climbing, along with the rest of the sector, but lately sank 3.8% to $191.38.

Also falling were Georgia's

Synovus Financial

(SNV) - Get Report

and California-based

City National

(CYN)

, which got their ratings lowered at Keefe Bruyette and Bear Stearns, respectively. Shares of the banks were off 2.1% and 12%.

In earnings,

FirstFed Financial

(FED)

surrendered 9.1% to $35.44 even though the Santa Monica, Calif., bank came in above targets with income of $8.4 million, or 61 cents a share. As is the case with so many other banks these days, that represents a severe year-on-year decline -- some 75% -- as its loan-loss provision more than quadrupled sequentially to $21 million, in line with guidance issued earlier this month. Analysts had sought earnings of 59 cents a share, according to Thomson Financial.

Hartford Financial

(HIG) - Get Report

slid, as well, after reiterating its below-par 2008 guidance for "core" income of between $9.80 and $10.20 a share. On average, analysts are seeking $10.28 a share. For the fourth quarter, the Connecticut-based insurance company booked a rising "core" profit of $840 million, or $2.66 a share -- well above the $2.50 EPS consensus. Still, Hartford shares were off 6.1% to $75.04.

E*Trade

(ETFC) - Get Report

, on the other hand, jumped 6% after the online broker predicted a "return to profitability" this year, with intentions to slice off $360 million in expenses and accumulating excess cash "approaching $1 billion" in its banking unit by the end of the year. In November, E*Trade announced a

$2.5 billion capital infusion from a group led by Citadel Investment Group, a deal that included the sale of its wrecked $3 billion portfolio of asset-backed securities.

E*Trade's most recent results, as expected, were

fairly miserable. Due to its foundering banking business, the firm's fourth-quarter loss came to $1.71 billion, or $3.98 a share -- even worse than Wall Street's rather pessimistic estimates for a $2.90 shortfall. That also reverses last year's profit of $176.7 million, or 40 cents a share. E*Trade's banking business is largely to blame, with asset losses and impairments reaching roughly $2.45 billion. It also recorded a loan-loss provision of $640 million for the year.

Shares of the New York-based company were recently up 21 cents at $3.69.

Similarly, Florida-based

BankUnited

(BKUNA)

swung to a fiscal first-quarter loss but said it will embark on a "major expense-cutting program" this year, having already laid off more than 45% of its wholesale-residential mortgage staff. A loan-loss provision of $65 million was effectively responsible for the quarterly shortfall, which totaled $25.7 million, or 73 cents a share. Analysts were seeking a 13-cent profit per share.

BankUnited said charge-offs totaled only $6 million this quarter, but it deemed the large provision "a prudent step," given rotten market conditions and the likelihood that bad loans will continue to mount. Its total loan-loss allowance now comes to $118 million. Shares were surging 14.4% to $5.73.

Also on the upswing was

Ameriprise Financial

(AMP) - Get Report

, a Minneapolis-based asset manager, after adjusted earnings climbed 13.7% year over year to $1.16 a share, surpassing the mean estimate by 13 cents. Shares were substantially higher before retreating to a 14-cent gain at $50.37 as the broader market lost steam.

Thornburg Mortgage

(TMA)

, a New Mexico-based mortgage lender, tacked on 3% after billionaire investor Richard Rainwater disclosed taking a 5.5% stake, or about 8.6 million common shares, after the market closed on Thursday. Rainwater also said he bought 3.9 million Series F preferred shares, which convert into 2.1739 shares apiece at a conversion price of $11.50. Both disclosures were made via the Schedule 13D, which implies an intent to exert control. Thornburg shares were rising 32 cents at $10.96.

The U.K.'s

Evening Standard

meanwhile reported that Wilbur Ross, another billionaire investor, is in serious talks to pick up the

shattered pieces of bond insurer

Ambac

(ABK)

. Shares were up 3.7% to $11.75.

And

Guaranty Financial

(GFG)

, which just went public last month, jumped 8.7% to $13.55 after Carl Icahn filed a Schedule 13D to disclose his 9.8% stake in the Texas bank.