A mass of downgrades and earnings cuts dragged down the financial sector for most of Monday, but that changed for the better late in the session after Standard & Poor's said it would maintain its triple-A ratings on bond insurers
Shares of Ambac were jumping 15.1% to $12.33, and MBIA was up 22.3% to $14.89.
On Friday, a report that a bailout for Ambac was in the works lifted Wall Street in the final hour, and another positive development had the same effect to start the new week.
Meanwhile, Visa is following rival
into the public domain, saying it will sell more than 400 million shares in its initial public offering in what could be the biggest U.S. IPO of all time, reaching up to $17 before the potential exercise of the underwriters' overallotment option. MasterCard raised $2.39 billion in its IPO nearly two years ago and was down 4.3% on Monday.
More than $10 billion of the proceeds from the Visa IPO will go to its member banks.
Elsewhere, Oppenheimer analyst Meredith Whitney slashed her 2008 earnings estimates on
to 75 cents a share from $2.70. Whitney, on average, cut her earnings estimates for the banking sector, including
Bank of America
by 29% and her 2009 projections by 13%.
Still, most of those stocks rose amid the recovery in the financial sector, with Bank of America, JPMorgan and Wells Fargo all turning positive after falling into the red earlier. Citi remained down 1.9%.
, included in the cuts, was also hit with the news of a lawsuit that it didn't pay its female brokers as much as their male counterparts. Last October the company closed a deal on buying brokerage A.G. Edwards. The fourth-largest bank erased its earlier loss and rose 0.4%.
Regional banks weren't as fortunate after Morgan Keegan cut its profit estimates on a number of stocks in the group.
fell 24 cents, or 4.5%, to $5.06.
slid 88 cents to $53.69.
First Horizon National
lost 38 cents to $18.76, while
rebounded and traded slightly higher.
Also among analyst actions, Goldman Sachs downgraded
to sell from neutral, saying mortgage losses will probably continue to increase. Fannie and Freddie both declined, but WaMu gained ground.
Fitch Ratings placed several mortgage insurers, including
on rating watch negative, citing continued weakness in the U.S. mortgage markets. In a statement, Fitch said it believes "the highlighted concerns over problems in the mortgage markets will continue to pressure, as it did in 2007, the bottom lines of most MI companies for the foreseeable future."
Still, shares of all three were on the rise.
On the losing side was
, who fell 4% to $32.80 after the company increased its total nonperforming assets.
As for the sector-tracking indices, the
Financial Sector Index spent most of the day in negative territory, but rose late by 1.5%. The Amex Securities Broker/Dealer Index was up 1.8%.