Updated from 2:52 p.m. EDT

Financial stocks for the most part mirrored the up-down action of the major indices Thursday, starting strong before dipping lower.

Shares of


(ICE) - Get Intercontinental Exchange, Inc. (ICE) Report

slumped on news the Atlanta-based futures-and-commodities exchange will

meet in Chicago next week to try to woo members of the

Chicago Board of Trade

( BOT).

ICE is battling against the

Chicago Mercantile Exchange

(CME) - Get CME Group Inc. Class A Report

in a bidding war for CBOT. All three exchanges were lower in recent trading: ICE was down 4.3% at $142.16, CME was 1.4% lower at $512.25 and CBOT was down 2.5% at $187.77.

Merrill Lynch

( MER)

agreed to acquire a noncontrolling investment in Sterling Stamos Capital Management. The investment firm, which has $4 billion in assets under management, will remain private. Shares of Merrill were down $1.21, or 1.3%, at $92.61.

In analyst action,

IndyMac Bancorp

TheStreet Recommends

( IMB) was downgraded by UBS to neutral from buy based on valuation and weak medium-term fundamentals. Shares were down 3.3% at $34.30. Meanwhile,

NY Community Bancorp

( NYB) fell 8 cents, or 0.5%, to $17.45 after an upgrade to market perform from underperform from Friedman Billings Ramsey, which also issued an $18 price target.

Meanwhile, some China-based stocks were still stinging from a sober outlook offered late Wednesday by former

Federal Reserve

Chairman Alan Greenspan, who suggested that equities in that country are overvalued and headed for an eventual correction.

Among those American depositary shares feeling the downward pressure was

China Life Insurance

(LFC) - Get China Life Insurance Co. Ltd. Sponsored ADR Class H Report

, which was down 3.4% at $46.61. Exchange-traded fund

iShares FTSE/Xinhua China 25 Index

(FXI) - Get iShares China Large-Cap ETF Report

was also hit, falling 2.7% to $110 on heavier-than-usual volume. After an early slump, however,

China Finance Online

(JRJC) - Get China Finance Online Co., Ltd. Sponsored ADR Report

was up 4.6% to $10.01.

More broadly, the


Financial Sector Index dropped 104.76 points, or 1.1%, to 9802.79. The KBW Bank Index lost 0.8% to 116.79.