The ongoing credit crunch was coming to a head Friday as former giants of the financial-services industry, now battered into submission, were forced into taking the sellout route.The pulped Countrywide ( CFC), for instance, will indeed
Today, WaMu shares extended on yesterday's Countrywide inspired leap to add 70 cents, or 4.9%, to $14.86 in recent trading. That, along with a number of rallying banks, had the KBW Bank Index bouncing 1.1% to 84.71 to sharply outperform the major indices. JPMorgan, another component, was hugging the flat line. Also joining the acquisition party was AmCOMP ( AMCP), a small Florida-based insurer. Shares soared nearly 40% after Employers Holdings ( EIG) agreed to pick it up for $12.50 a share in cash. In total, the deal is worth $230 million, including debt assumption, and it should close in the second quarter. AmCOMP shares added $3.29 to $12.04 as Employers rose 1.4%. But among Friday's big financial losers was American Express ( AXP), which said it will
take a roughly $440 million pretax hit in the fourth quarter due to rising loan delinquencies. After taxes, the charge should come to around $275 million, and it's expected to strain continuing operations income to between 70 cents and 73 cents a share. Thomson Financial's analyst estimates average at 87 cents a share, excluding items. Shares of the New York credit card issuer were off $5.78, or 11.8%, to $43.14. Fourth-quarter results will likewise suffer at Provident Bankshares ( PBKS) as the Baltimore bank takes a sizable charge from writing down "a significant portion" of its portfolio of real estate investment trust preferred securities -- $28.9 million, or 91 cents a share. The bank also vaulted its loan-loss provision to $13.5 million from last quarter's $7.5 million, which should ultimately chop 11 cents a share off its quarterly earnings. Shares were sinking 9% to $17.27. Elsewhere, AllianceBernstein ( AB) sheared about 30 cents off its 2007 profit guidance, suggesting a range of between $4.20 to $4.50 a share. The Street is looking for $4.63 a share. The New York investment manager blames this largely on "much lower-than-expected" hedge fund performance fees -- echoing the reasons behind its last outlook slashing in October -- as well as on investment losses associated with employee compensation plans. Shares were losing $6, or 7.8%, to $71.01. And BankUnited ( BKUNA) lost 6.8% on a Sandler O'Neill downgrade to sell. Shares of the Florida bank were down 34 cents at $4.66. More broadly, the NYSE Financial Sector Index was down around 43 points, or 0.5%, to 7,881.26 after briefly meandering around the flat line.