Wednesday's Financial Winners & Losers

Fremont General surges for the second day in a row.
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Updated from 1:46 p.m. EDT

Fremont General

(FMT)

again led the pack among financial winners Wednesday as most of the sector traded higher than the major indices.

After its stratospheric rise Tuesday, the California-based lender surged another 26.7% to $12.67 after Standard & Poor's and Fitch Ratings respectively shifted the stock to rate at "developing" and "evolving," from mutually negative previous ratings, on the heels of yesterday's

asset-sale announcement

.

Also on the upswing was

Crescent Real Estate Equities

(CEI) - Get Report

, a Texas-based real estate investment trust, climbing 3.2% to $22.31 in very active trading after

Morgan Stanley

(MS) - Get Report

agreed to buy it for $22.80 a share in cash. The transaction totals around $6.5 billion including liability assumption, and it should close by the end of the third quarter. Morgan Stanley shares tacked on 1.4%, or $1.16, earlier in the day and closed up 12 cents to $85.75.

Among other rising financial stocks,

Marsh & McLennan

(MMC) - Get Report

added 5% to $33.03 after its Guy Carpenter subsidiary appointed Charlie Fry as global chief operating officer, effective June 4. Insurance broker

AmTrust Financial

(AFSI) - Get Report

and credit rating agency

Moody's

(MCO) - Get Report

bounced 2.5% and 6%, respectively.

All but one of these winners propped up the NYSE Financial Sector Index, which earlier gained 56.5 points, or 0.6%, to 9963.21, to outperform the major indices for the second straight session. It closed up slightly at 9907.55. The KBW Bank Index delivered a mixed showing and brought up the rear once again; it was down 0.2% at 117.67.

In the red, however, were several downgraded names. UBS cut several insurers to neutral from buy, and among the worst affected was

Phoenix Cos.

(PNX)

, which lately slid 5.4% to $15.49. Also lowered were

MetLife

(MET) - Get Report

,

Nationwide Financial Services

(NFS)

and

Reinsurance Group of America

(RGA) - Get Report

, all on valuation. Shares slumped 1.6%, 1.5% and 4.3% respectively in recent trading.

Keefe Bruyette meanwhile downgraded another insurer,

Aon

(AOC)

, to market perform from outperform. The downtick came shortly after Aon announced the imminent departure of chief financial officer Dave Bolger. Shares sunk 1.2% to $42.47.