Radian, Citi: Financial Winners & Losers

Radian continued to rally on its positive earnings report, while big banks rose despite lawsuit against Citigroup related to its mortgage-underwriting practices.

Author:: Lauren LaCapra
Publish date:: Nov 5, 2010 1:14 PM EDT

NEW YORK (

TheStreet

) --

Radian

(RDN) - Get Report

shares were leading financial stocks on Friday, continuing a bull rally that started earlier in the week when the mortgage insurer reported a surprise quarterly profit.

Radian was up 9.1% at $10 by early afternoon, having hit $10.12 earlier in the session. The stock has had trouble staying above the $10 mark, unable to close above that level consistently since April.

On Tuesday, the Philadelphia-based mortgage insurer reported a profit of $112 million, or 84 cents per share - the first quarterly profit in over a year. Radian has slowly started to recover by insuring new mortgage debt with better underwriting standards, while it still works through old, soured debt.

Competitors don't seem to be faring quite as well. Quarterly performance declined at both

PMI Group

( PMI) and

Genworth

(GNW) - Get Report

during the September period.

MGIC Investment

(MTG) - Get Report

narrowed its losses, but still remained in the red.

Nonetheless, Radian's results have helped lift competitors' stocks as well. Genworth, PMI and MGIC are up in a range of 5% to 10% since the close before Radian's earnings report, while Radian is up more than 25%.

Elsewhere in the financial sector on Friday, big bank stocks were trading higher, despite ongoing concerns about mortgage buybacks and a broader market decline.

Citigroup

said in a regulatory filing that several major investors - including two Federal Home Loan Banks,

Charles Schwab

(SCHW) - Get Report

and a prominent hedge fund - are suing the firm over its mortgage-underwriting practices. One of the lawsuits, by Cambridge Place, seeks to recoup $1.2 billion in losses on subprime mortgages and also names

JPMorgan Chase

(JPM) - Get Report

Morgan Stanley

(MS) - Get Report

and

Goldman Sachs

(GS) - Get Report

Revelations of potential litigation against

Bank of America

(BAC) - Get Report

last month, also related to its mortgage practices, led to a big sell off in its stock. However, on Friday, all of the major mortgage servicers were trading higher.

Citi was up 3.1% at $4.47, with Bank of America up 4% at $12.61.

Wells Fargo

(WFC) - Get Report

was gaining the most ground in the the KBW Bank Index of large-cap stocks, up 4.9% recently at $28.80.

U.S. Bancorp

(USB) - Get Report

was up 4.1% at $26.19 as well, with and JPMorgan up 3.4% at $41.17.

-- Written by Lauren Tara LaCapra in New York

>To contact the writer of this article, click here:

Lauren Tara LaCapra

>To follow the writer on Twitter, go to

http://twitter.com/laurenlacapra