Publish date:

Tuesday's Financial Winners & Losers

Wells Fargo falls on an earnings miss.

Updated from 2:13 p.m. EDT with new stock prices

Financial stocks trailed the sinking broad market a day after

Federal Reserve

Chairman Ben Bernanke said the ongoing housing market turmoil will likely be a "significant drag" on the economy through early next year.

Evidence of the crunch, meanwhile, continued surfacing in fresh third-quarter results. Mortgage-security writedowns and mushrooming credit losses

ate into

Wells Fargo's

(WFC) - Get Report

quarterly profit -- which, at 68 cents a share, was 2 cents shy of Thomson Financial's consensus estimate despite gaining 6.2% over last year.

Shares of the San Francisco bank fell $1.41, or 3.92%, to $34.54, to weigh on both the


Financial Sector Index and the KBW Bank Index. The trackers were recently plunging close to 2% apiece.

Also dampening both indices was Cleveland's


(KEY) - Get Report

, which dropped 5.90% to $30.44 on a wide miss. Third-quarter continuing-operations income plunged by 23% from last year to 57 cents a share, or $224 million (less the effect of an accounting change). The Street was looking for 71 cents a share.

New York broker


(JEF) - Get Report

and Alabama bank

Regions Financial

(RF) - Get Report

each reported diminishing earnings that fell short of expectations. Shares shed 5.28% and 2.06%, respectively. Minneapolis-based

U.S. Bancorp

(USB) - Get Report

posted a penny per-share gain for a penny beat, but total earnings slipped slightly. Its stock gave up 0.49% to $32.35.


(C) - Get Report

was still suffering a day after unveiling a

tumbling third-quarter profit, with shares lately off 3.14% to $44.79, and troubled mortgage lender

TST Recommends

Thornburg Mortgage


slid 3.55% ahead of today's scheduled postclose earnings release.

Out of earnings,


reported that

Merrill Lynch


CFO Jeff Edwards will "probably" be ousted from that position within the next few months for making upbeat comments on Merrill's financial health during a July conference call, less than three months before its announcement of

enormous third-quarter writedowns.


cited "senior executives" at the firm. Merrill denied the report. Shares were down 2.46% to $71.79.

Elsewhere in the red,

Lehman Brothers


slipped 2.66% after mortgage-lending unit Aurora Loan Services disclosed it had axed 160 employees in response to housing-market woes, and

Navigators Group

(NAVG) - Get Report

lost 2.12% to $56.86 on a Friedman Billings downgrade to market perform from outperform.

But Boston bank

State Street

(STT) - Get Report

climbed 8.34% after third-quarter earnings totaled $1.15 a share, excluding one-time merger costs -- 21 cents better than the average analyst call, and 38.6% higher than last year. Revenue rocketed 47.9% year over year to a better-than-expected $2.24 billion. Shares gained $5.75 to $74.68.



was one of the sector's biggest price gainers after The Doctors Company agreed to buy it for $28 a share in cash, or roughly $281 million. Shares of the Los Angeles insurer surged 23.09% to $27.19 in light trading.


Bear Stearns


gained ground on news that China's Citic Bank is in talks to take a stake in the New York firm, whose pair of troubled

subprime mortgage-focused hedge funds made the broker one of the hardest hit by the credit crisis. Shares tacked on $2.36, or 1.96%, to $123.05.