The hamstrung market once again proved thoroughly unpredictable on Tuesday amid persisting credit fears, guiding financial stocks into a midday slide after a seemingly stalwart morning start.

Goldman Sachs ( GS) more or less mirrored these movements even after the New York brokerage posted a better-than-expected profit of $3.17 billion, or $7.01 a share, in the fiscal fourth quarter. Analysts polled by Thomson Financial were looking for $6.61 a share. Revenue sank 12.9% sequentially to $10.7 billion, but that still represents a 14.2% gain over last year and comes in ahead of the $10.2 billion average analyst estimate.

Still, Goldman shares traded largely in negative territory after a short-lived morning struggle to get above water. Recently, the stock was down $7.86, or 3.8%, at $200.77.

Ditto for Cleveland-based Third Federal Savings and Loan ( TFSL), which was down 2.7% at $11.95 despite swinging to a fiscal fourth-quarter profit of $15.1 million, or a nickel a share, from a year-ago loss. Those earnings also include a sizable income-tax expense, whereas last year's results were helped by a big tax-related gain.

Washington Mutual ( WM), meanwhile, announced the retirement of its chief legal officer, 10-year company veteran Fay Chapman. The Seattle savings bank didn't specify a date for this, but it did say that Chapman will serve as a consultant for two years to help with the transition and provide special counsel. WaMu shares were down 64 cents, or 4.3%, to $14.28.

Elsewhere, New Jersey-based Asta Funding ( ASFI) slid 8.3% to $25.81 on a Kaufman Bros. downgrade to hold from buy. Likewise, Deutsche Bank cut Marshall & Ilsley ( MI) to hold a day after the Milwaukee bank said it expects fourth-quarter charge-offs of up to $195 million as well as a loan-loss provision of as much as $235 million. MI stock was losing 2.9% to $26.51.

But Thornburg Mortgage ( TMA) lately climbed 5.5% on a few pieces of good news. The mortgage lender named as its new CEO former chief operating officer Larry Goldstone, who today said on CNBC that Thornburg would turn a fourth-quarter profit. Also, the Santa Fe, N.M., company reinstated its 25-cent common-share dividend while also declaring dividends for Series C, D, and E preferred shares. Shares were gaining 53 cents at $10.14.

And private-equity firm Prospect Capital ( PSEC) jumped 14.6% to $12.86 after upping its dividend by a quarter-cent to 39.5 cents a share. The New York-based company also projected current-quarter earnings of between 42 cents and 48 cents a share, which is about in line with current analyst expectations.

More broadly, the NYSE Financial Sector Index was lately off 59 points, or 0.7%, to 8,098.44. The KBW Bank Index was plunging 1.5% at 87.65.

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