Updated from 1 p.m. EDT

Financial stocks slumped again Wednesday to mirror the movements of the broader market, but big winners emerged in online brokers TD Ameritrade ( AMTD) and E*Trade ( ETFC).

Ameritrade climbed 3.8% in furious trading after announcing that Jana Partners and SAC Capital Advisors, which have disclosed owning around 8.4% of the company with the intention of acquiring additional shares worth more than $600 million, want Ameritrade immediately to pursue a merger with another broker. The firms specifically named E*Trade and Charles Schwab ( SCHW) as possibilities.

The firms also stressed that they wish to avoid "interference" by 40% shareholder Toronto-Dominion Bank ( TD), which they say "may be standing in the way" of such a merger.

Ameritrade gained 76 cents to $20.71, and E*Trade traded heavily to jump 7.3% at $25.60. Charles Schwab lost 1.1%, and Toronto-Dominion -- a member of the NYSE Financial Sector Index -- gave up 0.7%. The index sank 0.9%, or 84.93 points, to 9825.97.

But another component of the index, subprime-mortgage lender NovaStar Financial ( NFI), continued rising today following Tuesday's announcement that the Kansas City, Mo., firm had securitized $1.4 billion in nonconforming mortgage assets. Shares bounced 11% to $9.10.

The KBW Bank Index, which tracks large banks, fell 0.9% to 115.36.

As for individual names on the losing side, United Fire & Casualty ( UFCS) slid 3.1% to $37.71 after A.G. Edwards cut the Iowa-based insurer to hold from buy, and Prudential Financial ( PRU) shed 1.1% to $99.46 on word the New Jersey life insurer is shutting down its equity-research business, Prudential Equity Group.

Elsewhere, shares of Hilb Rogal & Hobbs ( HRH) slouched after the Virginia-based insurance broker agreed to buy Charlton Manley, a Kansas-based company that mainly operates as an insurance agency. Hilb Rogal was off 11 cents to $43.71.

If you liked this article you might like

Lackluster Finish for U.S. Stocks

Lackluster Finish for U.S. Stocks

Stocks Continue to Waver at the Flat Line

Stocks Continue to Waver at the Flat Line

Oil Slides as Stocks Post a Mixed Showing

Oil Slides as Stocks Post a Mixed Showing

Stocks Flutter Near the Flat Line

Stocks Flutter Near the Flat Line

Wall Street Falls Amid Inflation Talk

Wall Street Falls Amid Inflation Talk