Updated from 1:53 p.m. EDT

Financial stocks largely foundered in negative territory Thursday as numerous names were crushed by various negative news.

Tax preparer

H&R Block

(HRB) - Get Report

traded heavily, sliding 3.3% to $22.04 after

swinging to a GAAP-based loss

due to its struggling subprime mortgage-lending unit, which the firm

agreed to sell

in April.

Excluding the heavy impact of that business, the firm made just $1.81 a share -- up 18 cents from last year but 7 cents below the consensus estimate from Thomson Financial. Full-year earnings widely missed, coming in at 99 cents a share vs. the expected $1.17. Looking ahead, fiscal 2008 income should miss by at least 2 cents.

Nasdaq Stock Market

I:IXIC

also suffered on news that the London Stock Exchange is in talks to buy out Borsa Italiana. Should a merger result, this could

complicate

any additional attempt by the Nasdaq to take out the LSE. The exchange failed in a hostile bid for the LSE earlier this year. Shares slid 1%, or 31 cents, to $30.25.

Chicago's

PrivateBancorp

(PVTB)

fell 9.6% to $30.03 on soft second-quarter guidance, including an estimate that substantial new hires at its forming Kansas City location will reduce per-share earnings by 2 cents. Lender

Dollar Financial

(DLLR)

, of Berwy, Pa., said it will offer $150 million in senior convertible bonds to institutional buyers, with an initial-purchasers' option for another $22.5 million worth to cover any overallotments. Shares were off 5.9% to $29.28.

Elsewhere, Citigroup cut

Prudential Financial's

(PRU) - Get Report

rating to hold from buy, citing valuation, after which the insurer's shares slid 0.8% to $99.51.

The

NYSE

Financial Sector Index and the KBW Bank Index were both up about 0.1%.

Among very few financial winners today were insurers

MBIA

(MBI) - Get Report

and

RenaissanceRe

(RNR) - Get Report

, which were respectively upgraded to buy at Citigroup and outperform at Bernstein. The former closed up 3.1% to $64.66; the latter added 0.9% to $59.49.

Boston Private Financial

(BPFH) - Get Report

was also rising after the bank predicted "cash" second-quarter earnings of between 47 cents and 49 cents a share. GAAP-based earnings (excluding an impairment charge) should range between 37 cents and 39 cents a share, which would top estimates by at least a penny. Shares were 0.7% higher at $27.94.