Financial stocks trundled upward to crown the surging Nasdaq Wednesday even as profound credit-market troubles continued to haunt the sector.

Alesco Financial ( AFN) catapulted 31.6% after the Philadelphia-based mortgage-investment firm announced a $50 million share-repurchase program. Second-quarter adjusted earnings also totaled 31 cents a share, which meets the sole profit estimate from Thomson Financial. Shares were up $1.16 to $4.83.

New York's Crystal River Capital ( CRZ), another real-estate investor, jumped 14% to $11.85 on word it will buy back up to 2 million of its shares. ING Group ( ING), based in the Netherlands, reported a 27.1% year-over-year earnings leap to $3.53 billion (2.56 billion euros), or $1.63 a share. Shares of the bank added $2.44, or 5.8%, to $44.27.

MGIC Investment ( MTG), a private-mortgage insurer, soared 15.3% after saying it's "not obligated" to close its pending stock-swap merger with Radian Group ( RDN). MGIC cited last week's revelation that the companies may have to write off their investments in Credit Based Asset Servicing and Securitization, which sustained "unprecedented losses" ultimately due to borrowers with questionable credit.

Radian said it doesn't believe these developments dissolve MGIC's obligations, but Citigroup downgraded the stock to hold from buy and Standard & Poor's put the firm on negative credit watch. Radian shares hurtled downward by as much as 24% this morning before making a quick recovery. Lately, they were off 1.6% to $20.95. MGIC was rising $6.03 to $40.87.

Impac Mortgage ( IMH) blazed higher, meanwhile, after announcing that it has financing facilities, has "made all margin calls to date," and has enough capital to satisfy future margin calls. Shares of the stock, which plummeted Tuesday after a UBS analyst expressed doubt regarding whether or not Impac can meet margin calls, vaulted 43.4% at $1.75 to erase most of those losses.

Elsewhere, Luminent Mortgage ( LUM) fell another 7.4% after the San Francisco-based firm announced it has gotten default notices from two repo lenders. Luminent says it continues to "vigorously explore all of its alternatives with respect to its sudden liquidity issues" stemming from housing-market woes.

Luminent shares were initially recovering from yesterday's precipitous drop -- triggered by news that the mortgage investor had suspended its dividend -- before trading was halted this morning. On resumption, the stock slid 8 cents to $1.

Shares of Delta Financial ( DFC) gave up a third of their value after the mortgage lender announced on its Web site that it has delayed its second-quarter earnings release. The Woodbury, N.Y., firm issued no press release and gave no further explanation. Shares slumped $2.65 to $5.30.

And Conseco ( CNO) sank 9.4% to $15.07 after A.M. Best cut several of the Carmel, Ind., insurer's ratings and downgraded its outlook for all of these to negative from stable. The insurance-rating agency primarily cited "volatile operating results" at Conseco's senior-health unit.

More broadly, however, the NYSE Financial Sector Index soared 223.46 points, or 2.6%, to 9,346.13. The KBW Bank Index was up 2.8% to 111.19.

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