Monday's Financial Winners & Losers

Clayton Holdings plunges on negative analyst notes.
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The financial sector was spinning its wheels Monday amid a mixed bag of news after Friday's

confluence of share-price recoveries.

Over the weekend, reports emerged regarding the

ousting of

Merrill Lynch

(MER)

CEO Stanley O'Neal following

massive disclosed writedowns last week that pushed the broker to a stunning third-quarter loss. O'Neal also reportedly

angered the company board by calling

Wachovia

(WB) - Get Report

Chief Kennedy Thomson in order to suggest a merger.

The Wall Street Journal

said the resignation would be announced by this morning, while

The New York Times

earlier reported that the board was united in its decision to push O'Neal out of that position. No official word has yet been issued.

After a buoyant Friday, Merrill shares saw nervy action and traded mostly in the red Monday morning. Recently, however, they were up 1.8% to $67.30.

Countrywide

(CFC)

was on the retreat after Friedman Billings cut $5 off the mortgage lender's price target, to $15 following Friday's report of a big quarterly loss. The analyst cited continued softness in the broader housing market, notwithstanding the mortgage lender's

initially share-boosting prediction that it will turn a profit next quarter and in 2008. Shares surrendered 1.9% to $16.98.

Clayton Holdings

(CLAY)

, a mortgage analytics company, plunged 15.5% to $4.63 on a couple of negative analyst notes. Standard & Poor's backed its junk rating on Clayton's debt by cutting its outlook to stable from positive, and JMP downgraded the stock to market perform from market outperform. On Friday, the Shelton, Conn., company said it swung to a surprise adjusted loss of 5 cents a share in the third quarter.

Colonial Properties Trust

(CLP)

, a Birmingham, Ala., real estate investment trust, was lowered to underperform at BMO Capital Markets. Shares lost $1.05, or 3.3%, to $31.18.

Elsewhere, health insurer and managed-health provider

Humana

(HUM) - Get Report

said third-quarter non-GAAP earnings came to $1.53 a share, or 4 cents over Thomson Financial's per-share estimates. Shares of the Louisville, Ky.-based company climbed this morning before backing off 3.4% at $73.

California bank

Fremont General

(FMT)

gained ground after 8.2% shareholder Amalgamated Gadget said in a late-Friday regulatory filing that it has engaged Nicholas Krsnich, former Countrywide Chief Investment Officer and CFO at its bank subsidiary, effectively "to help resolve management issues at Fremont."

Shares of Fremont, which used to offer subprime-mortgage loans before the sector imploded earlier this year, were lately up 3% to $3.14.

And

Citigroup

(C) - Get Report

ticked up after Japanese unit

Nikko Cordial

said its July-September earnings more than doubled from last year to 24 billion yen ($209.2 million) from last year's 10 billion yen. Shares were recently adding 3 cents to $42.66.

Broad sector trackers were mixed. The

NYSE

Financial Sector Index added 0.3%, and the KBW Bank Index was down 0.3%.