Updated from 2:34 p.m. EDT
Financial stocks leapt out of the gate Thursday before cooling off around midmorning to join the lackluster major indices.
One of the biggest winners was
Municipal Mortgage & Equity
. Shares vaulted 20.4% after CEO Michael Falcone affirmed in a conference call that the company is "not engaged in subprime or any other single-family mortgage lending activities," misconceptions about which the company assumes triggered the previous day's sharp stock-price decline. The Baltimore firm also upped its dividend by a half-cent to 52.25 cents. Shares closed up $3.67 at $21.65 to mostly recover from Wednesday's slide.
, of Pennsylvania, jumped 11.5% to $32.10 on a few pieces of good news. The insurer reported a profit of 81 cents a share (excluding realized gains) in the second quarter, or a dime past analysts' mean target, as per Thomson Financial. The firm also boosted its dividend by 31.6% to 25 cents a share and added another 1.6 million shares to its stock-repurchase program.
First Federal Bank of California
likewise authorized another 1.5 million shares for buyback. Shares traded up 7.5% to $46.04.
, meanwhile, posted second-quarter income of $181.5 million from continuing operations (adjusted), or 51 cents a share, for a year-over-year increase of 21.4% and a 4-cent EPS beat. The stock climbed 6.3% to $25.49.
bounced 5% after saying it earned $2.65 billion (3.19 billion Swiss francs), or $2.34 a share, vs. $1.54 a share last year.
First Federal, Unum and Credit Suisse all lent support to the
Financial Sector Index, which was up 0.5% to 9048.58. The KBW Bank Index was up 0.3% to 106.16.
Among individual losers,
Accredited Home Lenders
plummeted some 35.3% after warning investors in its year-end filing that it cannot guarantee its ability to continue as a going concern. The struggling subprime-mortgage lender specifically cited the possibility of failing to secure waivers or waiver renewals regarding certain covenants from its credit facilities, as well as the prospect of an "unanticipated large margin call" from one of those lenders. Shares closed at $5.31.
fell 2.7% to $74.91 despite a
soaring second-quarter profit of $161 million, or 62 cents a share.
American Equity Investment Life
surrendered 6.1% after second-quarter income tumbled 42.3% from a year ago to 41 cents a share, and asset manager
swung to a second-quarter loss of 39 cents a share. Shares closed up 10 cents, or 0.9%, to $10.99.