Updated from 1:35 p.m. EDT

Choppy trading jerked the financial sector in and out of the red Tuesday amid

W Holding's

( WHI) precipitous nosedive.

Shares plunged more than 37.3% in heavy trading after the Puerto Rico-based bank announced that one of its larger asset-based loans is impaired, with an estimated collateral deficiency of at least $80 million. The bank hasn't yet determined its ultimate financial impact. Shares closed down $1.87 to $3.14

Payment processor

Fidelity National Information Services

(FIS) - Get Report

also fell on news it had taken out Applied Financial Technology, a purveyor of risk analytics, analysis and data for the mortgage industry. Financial terms weren't disclosed. Shares lost 0.9% to $53.10.

Among other sliding financial stocks today, asset manager

Fortress Investment Group


gave up 4.1% to $22.30; student lender

First Marblehead


shed 4.9% to $38.40; and

Freedom Acquisition Holdings

( FRH) was off 3.7% in partial retreat from some of yesterday's M&A-related gains.

W Holding and First Marblehead weighed on the


Financial Sector Index, which was down 0.2% to 9564.49. The KBW Bank Index was up 0.1%.

Among individual winners, San Diego's

First Community Bancorp

(FCBP) - Get Report

rose 3% on word it had taken out commercial-finance firm Business Finance Capital for $35 million in cash and stock. That comes on the heels of Monday's Friedman Billings upgrade, as well as its entry into the S&P MidCap 400. Shares closed up $1.68 at $57.66.

Life insurer

Manulife Financial

(MFC) - Get Report

ticked up earlier in the day after agreeing to buy Berkshire-TWC Financial's mutual fund and securities dealerships in Canada. Terms weren't disclosed; the deal should close by Aug. 31. Shares of Canada-based Manulife traded actively, closing down 0.4% to $36.72.

Among other rising financial stocks today,

Wilshire Bancorp


jumped 3.2% to $12.12; broker


(JEF) - Get Report

added 1.5% to $26.43; and

Sovereign Bancorp

( SOV) was up 0.3% to $21.57.