Financial stocks rose early along with the overall market Friday as the House of Representatives moved closer to making the government's proposed rescue package a reality, but after the vote, the sector pulled back from its highs. The House voted to approve Senate amendments that allowed the Bush administration's bailout plan to proceed by a 263-171 vote. However, traders sold on the news, and the major market averages came off their best levels. Recently, the KBW Bank index was down 1.4%, while the NYSE Financial Sector index was up 1.8%. The Amex Securities Broker/Dealer index was tacking on 0.6%. Among stocks, Wachovia ( WB) was the story of the day, jumping 70% to $6.64 after Wells Fargo ( WFC) said it would acquire the North Carolina bank for more than $15 billion. Earlier this week, Citigroup ( C) said it had a deal, with government backing, to buy Wachovia. Citi said the Wells Fargo transaction was a "clear breach of an exclusivity agreement" it had with Wachovia and demanded the new proposal be shelved. Shares of Citi were down 12%, and Wells was up 7.4%. AIG ( AIG) was also rising after it said it plans to sell some of its businesses while holding on to its U.S. property and casualty and foreign general insurance operations. Shares of AIG were up almost 9% to $4.35.
UBS ( UBS) was trading to the downside, falling 2.2% to $19.66 following word from the Swiss bank that it will eliminate around 2,000 jobs in its investment-banking unit. UBS said the latest job cuts will bring staffing levels to about 17,000 by year-end, down about 6,000 since the third quarter of last year. Elsewhere in the group, Goldman Sachs ( GS) was up 3.5%. Morgan Stanley ( MS) was gaining 8.8%, but JPMorgan Chase ( JPM) was easing by 0.9%.