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Legg Mason

(LM) - Get Legg Mason, Inc. Report

tumbled Wednesday, a day after the Baltimore-based asset manager warned of a steep earnings shortfall.

The company expects to earn 96 cents to $1.02 a share in its fiscal second quarter, far shy of the $1.16-a-share Thomson Financial consensus estimate. Revenue is likely to fall 1% from the first quarter. Legg Mason also incurred a $12 million mutual fund distribution fee, which will trim earnings by 4 cents a share. Shares were trading down $17.75, 16.9%, to $87.56.

Midland Company

( MLAN) gained after the Amelia, Ohio-based insurer said it expects third-quarter results to beat Wall Street's expectations.

The company said it anticipates profit of 83 cents to 89 cents a share, or 80 cents to 86 cents a share before realized capital gains. This is up from the year-ago earnings of 20 cents a share, which included 11 cents of realized capital gains. Analysts are looking for earnings of 56 cents a share. Shares were trading up $2.86, or 7.15%, to $42.86.

Progressive

(PGR) - Get Progressive Corporation Report

gained after the Mayfield Village, Ohio-based auto insurer posted a 34% rise in third-quarter income.

The company reported earnings of $409.6 million, or 53 cents a share, compared with $305.3 million, or 38 cents a share, a year ago. Wall Street was looking for earnings of 50 cents a share. Net premiums written increased 1% to $3.58 billion, while premiums earned increased 2% to $3.54 billion. Shares gained 59 cents, or 2.4%, to $25.30.

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First Federal Banc of the Southwest

(FFSW)

soared on news that the Roswell, N.M., bank would be bought by

Washington Federal

( WFSL) for $24.14 a share in cash, or $99 million. First Federal shares gained $5.35, or nearly 30%, to $23.50. Washington Federal as off about 5 cents to $22.63.

TD Ameritrade

(AMTD) - Get TD Ameritrade Holding Corporation Report

plunged after Bank of America announced a plan to offer customers free stock trading, a move investors fear could crimp profits at the online brokerage. Ameritrade fell $2.20, or 11.5%, to $16.90.

NovaStar Financial

( NFI) retreated after the Kansas City, Mo.-based mortgage lender was downgraded by

Morgan Stanley

to underweight from equal-weight. Shares fell 94 cents, or 2.9%, to $31.87.