Updated from 12:55 p.m. EDT

Financial stocks slunk behind the rest of the market Monday as negative analyst calls helped to weigh down the sector.

Countrywide Financial was among those affected, sinking 1.8% to $40.49 after Friedman Billings put a damper on speculation that the mortgage lender will repurchase far more of its stock than the amount announced last week since the lender sold far more in convertible bonds ($4 billion) than necessary for the buyback.

The analyst cut Countrywide's rating to market perform from outperform, saying the California-based mortgage lender may, at most, add another $1 billion to the authorization in the second half. As of Friday's close, the program will cost less than $1 billion.

Friedman Billings also downgraded Maryland's CapitalSource ( CSE) to market perform, pressuring the lender's shares down 1.1% to $24.95. XL Capital ( XL) lost 0.3% to $81.33 after Morgan Stanley lowered the Bermuda-based insurer to equal-weight from overweight on valuation.

All three of the above names strained the NYSE Financial Sector Index, which was down 14.32 points to 9864.62. Most KBW Bank Index components were slipping -- among them, banks State Street ( STT - Get Report) and Washington Mutual ( WM - Get Report), which closed down 0.7% and 0.3%, respectively. The index was off slightly at 117.91.

On the same token, Ameriprise Financial ( AMP - Get Report) was on the upswing after Goldman Sachs upped its price target by $3 to $68 and maintained its buy rating on the stock following a positive meeting with management. The Minneapolis-based asset manager added 1.2% to $62.18.

Elsewhere, broker Bear Stearns said its Bear Energy subsidiary agreed to buy all the power and natural-gas assets of Williams Companies' ( WMB) energy-trading and marketing unit for $512 million. The deal should close in the quarter ending Nov. 30. Bear's shares started off slightly lower but closed up 1% to $151.07. Williams gained 7.3% to $31.06.

Among other rising financial names, student lender First Marblehead ( FMD) and online broker optionsXpress each saw heavier-than-usual trading that lifted shares by at least 5%. Another online broker, Knight Capital Group ( NITE), was up 4% to $17.28.