For financial stocks on Tuesday, a mildly hopeful start quickly gave way to another steep slide as damaging Countrywide (CFC) rumors combined with yet more trappings of credit-market woes.On the heels of a crushing year for the nation's biggest mortgage lender, Countrywide shares plummeted 28.4% in furious trading after speculation swirled that it would soon
Among the biggest decliners today, meanwhile, were bond insurers Ambac ( ABK) and MBIA ( MBI). Morgan Stanley slashed bottom-line estimates for the fourth quarter and 2008 on concerns that the companies are being strained ever harder by the roiled credit markets, according to Marketwatch. Ambac plunged 16.7% to $19.56, MBIA lost 20.7% to $13.98, and fellow bond insurer Security Capital Assurance ( SCA) took a 23.7% dive to $2.41. Amid today's depressed mood, even upgraded firms like Arthur J. Gallagher ( AJG), an insurance broker, and Federated Investors ( FII), an investment manager, ended to the downside. Each was raised to buy from neutral -- the former at Merrill Lynch, on valuation and an attractive dividend, and the latter at UBS -- but after a day spent mostly in the green, they each finished slightly down at $23.45 and $38.96, respectively. The NYSE Financial Sector Index plunged 212.54, or 2.7%, to 7,701.52, and the KBW Bank Index took a 4% free fall to 80.59. Among those few financial stocks closing higher, futures-and-options broker MF Global ( MF) added 1.9% to $28.92; Reinsurance Group of America ( RGA) gained 1% to $51.92; and exchange IntercontinentalExchange ( ICE) was up 0.6% to $165.10.