Updated from 12:55 p.m. EDT

Financial stocks slunk behind the rest of the market Monday as negative analyst calls helped to weigh down the sector.

Countrywide Financial

( CFC) was among those affected, sinking 1.8% to $40.49 after Friedman Billings put a damper on speculation that the mortgage lender will repurchase far more of its stock than the amount announced last week since the lender sold far more in convertible bonds ($4 billion) than necessary for the buyback.

The analyst cut Countrywide's rating to market perform from outperform, saying the California-based mortgage lender may, at most, add another $1 billion to the authorization in the second half. As of Friday's close, the program will cost less than $1 billion.

Friedman Billings also downgraded Maryland's



to market perform, pressuring the lender's shares down 1.1% to $24.95.

XL Capital

(XL) - Get XL FLEET CORP. Report

lost 0.3% to $81.33 after Morgan Stanley lowered the Bermuda-based insurer to equal-weight from overweight on valuation.

All three of the above names strained the


Financial Sector Index, which was down 14.32 points to 9864.62. Most KBW Bank Index components were slipping -- among them, banks

State Street

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Washington Mutual

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, which closed down 0.7% and 0.3%, respectively. The index was off slightly at 117.91.

On the same token,

Ameriprise Financial

(AMP) - Get Ameriprise Financial, Inc. Report

was on the upswing after Goldman Sachs upped its price target by $3 to $68 and maintained its buy rating on the stock following a positive meeting with management. The Minneapolis-based asset manager added 1.2% to $62.18.

Elsewhere, broker

Bear Stearns

( BSC) said its Bear Energy subsidiary agreed to buy all the power and natural-gas assets of

Williams Companies'

(WMB) - Get Williams Companies, Inc. Report

energy-trading and marketing unit for $512 million. The deal should close in the quarter ending Nov. 30. Bear's shares started off slightly lower but closed up 1% to $151.07. Williams gained 7.3% to $31.06.

Among other rising financial names, student lender

First Marblehead


and online broker


( OXPS) each saw heavier-than-usual trading that lifted shares by at least 5%. Another online broker,

Knight Capital Group


, was up 4% to $17.28.