Updated from 2:06 p.m. EDT

The financial sector plodded behind the rest of the market Thursday morning before catching up with the major indices.

Among the winners was

Capital One Financial

(COF) - Get Report

, which said it will ultimately

slash some 2,000 jobs

(it has already eliminated about half that many) as part of a larger cost-cutting restructuring effort. For this, the lender expects to incur a one-off pretax charge of about $300 million, mostly within 2007, but also projects that it will save about $700 million pretax in 2008 and 2009.

The company bagged a Friedman Billings upgrade to outperform today. Shares closed up 1.1% to $79.67.


Financial Sector Index was down slightly at 9613.35, and the KBW Bank Index was up slightly at 113.91.



(MBI) - Get Report

, another component of the NYSE index, added 2.4% to $63.47 after a Calyon Securities analyst upped the stock to buy.

On the other hand,

Citizens Republic Bancorp

( CRBC), of Flint, Mich., lost 7.2% after saying a sharp increase in second-quarter nonperforming loans should pull down per-share earnings by 26 cents to 30 cents. Shares closed down $1.40 at $18.15.

KeyBanc Capital markets cut Citizens Republic to hold from buy, and Credit Suisse lowered

CNA Financial's

(CNA) - Get Report

rating to underperform with a $46 price target -- 7% below Wednesday's closing price. The analyst cited, among other things, the Chicago-based insurer's above-average exposure to higher interest rates and residential mortgage-backed securities. CNA shares fell 3.5% to $47.75.


Boston Private Financial

(BPFH) - Get Report

said it will offer $250 million in contingent convertible senior bonds to institutional buyers, along with an initial purchasers' option for another $37.5 million worth. Up to $40 million will go to a share-repurchase program, and the remaining funds are slated to pay off existing debt. Shares closed off $1.23, or 4.3%, to $27.24.


Aspen Insurance


gave up 1.8% to $28.19 on news that two of its founding stockholders --


(BX) - Get Report

and DLJ Merchant Banking Partners -- will completely unload their stakes in the company. The firms will together sell about 7.9 million Aspen shares.