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Updated from 11:33 a.m. EDT

Shares of

Doral Financial


were among the


losers Friday, falling 11.4% after the company said it is in default with respect to its reporting obligations under two bond indentures.

The company, which previously disclosed that it is being informally probed by the

Securities and Exchange Commission

because of financial restatements the company plans to make, said the defaults were triggered because it did not file its quarterly reports for the first quarter by May 25. If the company does not cure the default for the first indenture within 60 days, or 90 days for the second indenture, then the trustee or holders would have the right to force the company to pay the debts sooner than expected. "While we consider such an acceleration to be unlikely," it said, "if it were to occur, we may be unable to meet our payment obligations."

In addition to the default news, the mortgage lender also said that it would likely restate the value of its floating-rate interest-only strips by $600 million. In April, the company estimated that the correction would decrease the fair value of its strips by $400 million to $600 million. At the time, Doral said the after-tax effect of the adjustments would range from $290 million to $435 million. The charge, however, will be a noncash item and will not reduce the company's cash balance. Shares traded down $1.48 to $11.52.

Wet Seal

( WTSLA) rose 8.8% after the company reported a smaller first-quarter loss on a modest improvement in sales. The apparel retailer posted a loss of $8.6 million, or 23 cents a share, on sales of $103.8 million. Wet Seal's results included charges totaling $1.5 million. Analysts polled by Thomson First Call were expecting a loss of 41 cents a share. A year ago the company posted a loss of $20 million, or 66 cents a share, on sales of $99.9 million. Shares traded up 34 cents to $4.19.

Shares of

Frontier Airlines

( FRNT) traded actively after the company posted a narrower fourth-quarter compared with a year ago. The discount carrier reported a loss of $3.7 million, or 10 cents a share, on sales of $218.5 million. Results included a 5-cent gain from fuel derivatives and the sale of spare parts and inventory. Analysts were expecting a wider loss of 21 cents a share. A year ago the company posted a loss of $5.8 million, or 16 cents a share, on sales of $172.1 million. Shares traded down 14 cents to $12.09.

Esterline Technologies


rose 10% after the company posted second-quarter results that were better than expected. The maker of aerospace equipment earned $14.7 million, or 58 cents a share, on sales of $211.6 million. Analysts were expecting earnings of 45 cents a share on sales of $197.8 million. A year ago the company earned $9 million, or 42 cents a share, on sales of $146.5 million. Looking ahead, Esterline said it now expects full-year earnings of $1.90 to $2.05 a share, up from previous guidance of $1.70 to $1.80 a share. Analysts are expecting earnings of $1.86 a share. Shares traded up $3.49 to $38.35.

Shares of

Payless ShoeSource


rose modestly after the company said that its chief executive would leave the company in July. Steven Douglass will be replaced by Matthew Rubel, who most recently served as chief executive at Cole Haan, a subsidiary of



. Douglass said he is leaving the company so that he can pursue new personal and business interests and opportunities. Shares traded up 14 cents to $16.77.

NYSE volume leaders included



, down 55 cents to $28.35;

Lucent Technologies

( LU), up 2 cents to $2.83;



, down 14 cents to $2.70;

American International Group


, up 69 cents to $56.40;


( KRB), up 15 cents to $21.35; and



, down 14 cents to $7.91.


volume leaders included



, up 17 cents to $26.07;



, up 2 cents to $27.39;



, down 21 cents to $6.93;

Sirius Satellite Radio


, up 18 cents to $5.97;

Sun Microsystems


, up 5 cents to $3.87;

Cisco Systems


, down 11 cents to $19.79;



, down 7 cents to $12.85; and

Ditech Communications

( DITC), down $4.80 to $7.79.