Financial stocks were mostly trending higher Tuesday following Monday's big Citigroup ( C)-strained selloff. But the bank itself was dropping again -- this time on a Bank of America downgrade to neutral from buy -- a day after it announced huge current-quarter writedowns and the departure of CEO Chuck Prince. The analysts, who had previously intoned that any improvement at the besieged banking giant could be an upward catalyst, now said investor confidence has eroded too much to recommend the stock based purely on valuation. Shares surrendered another 2.6% to $34.97 in very dense trading. Still, the NYSE Financial Sector Index and the KBW Bank Index were adding 0.9% and 1.2%, respectively, with the former sector tracker helped along by a number of upward moves. Component IndyMac Bancorp ( IMB) spent most of its time in positive territory even though the California-based mortgage lender swung to a third-quarter loss that was far bigger than expected and slashed its dividend in half to 25 cents a share. IndyMac said it lost $202.7 million, or $2.77 a share, compared with a profit of $1.19 a share last year. "No one in the mortgage industry came away unscathed in the quarter," said CEO Michael Perry. Operating liquidity was among the report's few positives, jumping by more than half sequentially to an "all-time high" of $6.3 billion. Shares were up substantially earlier in the day before retreating to close down 2.2%.