Updated from 2:18 p.m. EDT with new stock prices

The financial sector traded in the green through early afternoon Wednesday amid positive earnings out of names such as

JPMorgan Chase

(JPM) - Get Report

.

The New York brokerage jumped 2.79% after its third-quarter profit

climbed modestly from last year to $3.37 billion, or 97 cents a share, even though it took $1.3 billion in markdowns on leveraged funded and unfunded commitments and weaker trading performance. Analysts polled by Thomson Financial were looking for just 90 cents a share.

The results

stand in stark contrast to those of banks such as

Citigroup

(C) - Get Report

, whose sizable writedowns helped

slice off more than half of its quarterly profit. Citi shares were still off 1.1% two days after the news, though they briefly jutted into positive territory on rumors -- later denied by the bank -- that CEO Charles Prince will soon resign.

JPMorgan, however, ratcheted up $1.26 to $46.37. That helped give a morning boost to the

NYSE

Financial Sector Index and the KBW Bank Index, but more recently, the trackers finished mixed, with the NYSE Financial Index up 0.46% and the KBW Bank Index down 0.11%.

BlackRock

(BLK) - Get Report

reported more-than-doubled (from last year) adjusted third-quarter income of $300.1 million, or $2.29 a share, which blew past the $1.91 average estimate. Shares of the New York-based investment manager bounced $11.81, or 6.41%, to $196.00.

Security Capital Assurance

(SCA) - Get Report

, a Bermuda-based insurer, said third-quarter adjusted gross premiums (a measure of new business production) should jump 53.8% year over year to about $140 million, while also predicting sizable losses from its credit-derivatives portfolio. That should induce an overall GAAP-based loss, but it won't affect operating earnings. Shares were up 5.32% to $21.98.

Fellow insurer

Midland

( MLAN) was among the day's biggest price gainers after Germany's

Munich Re

agreed to buy it out for $65 a share in cash. The $1.3 billion deal should close in the first half of 2008. Shares of Ohio-based Midland vaulted $6.30, or 11%, to $63.57.

Elsewhere,

Reuters

reported that

Morgan Stanley

(MS) - Get Report

is laying off about 300 employees largely from segments hit hardest by the credit crunch, according to a person familiar with the situation. Shares booked early gains but were finished up only 0.78% to $65.81.

Thornburg Mortgage

( TMA), meanwhile, plunged 11.93% after the struggling New Mexico mortgage lender

suspended its dividend and swung to a third-quarter loss of $1.08 billion, or $8.83 a share, against a year-ago profit. Analysts were seeking a loss of $7.98 a share, less special items.

Contributing heavily to the bleak results was a $1.09 billion

writedown from the sale of $21.9 billion in adjustable rate mortgage assets. Thornburg shares were trading at $10.04.

MGIC Investment

(MTG) - Get Report

also reported a big third-quarter loss -- $4.60 a share -- to reverse last year's $1.55-a-share profit. The Milwaukee-based mortgage insurer primarily cited losses on its exposure to subprime-mortgage investor C-BASS (Credit Based Asset Servicing and Securitization). Shares slid 15.26% to $26.16.

Likewise, New York lender

CIT

(CIT) - Get Report

swung to a loss in that quarter and moreover set plans to sell $600 million worth of equity units, initially consisting of a contract to purchase CIT stock and a 2.5% interest in a $1,000 senior bond. Underwriters will have an option for another $90 million worth of units. Shares were down 5.77% to $34.98.

Also reporting dwindling third-quarter bottom lines were asset manager

Piper Jaffray

(PJC) - Get Report

and banks

Fulton Financial

(FULT) - Get Report

and

Hancock

(HBHC)

. Shares slumped 5% or more.

Finally,

Fremont General

( FMT) filed delayed first-half results that revealed huge losses from its subprime-lending business and from costs associated with shutting it down. The total loss for that period came to $855.8 million, or $11.10 a share. Excluding those items, which are classified as discontinued operations, the company had a small break-even profit. Shares sank 6.77% to $3.72 in heavier-than-usual trading.