Updated from 2:50 p.m. EDT

Financial closed up in a mixed day of trading Wednesday, as life insurance stocks soared amid a report that a bailout was coming, but bank stocks sagged ahead of earnings reports next week and a dour economist forecast.

The Wall Street Journal reported late Tuesday that the Treasury Department will extend the Troubled Asset Relief Program to several qualifying life insurers that are bank holding companies or own a thrift. The Hartford Financial ( HIG), Lincoln Financial ( LNC) and Genworth Financial ( GNW), all of which bought small banks or thrifts late last year in an effort to qualify for the program, were up sharply in Wednesday trading. The Hartford shares closed up 13.5% to $9.59. Lincoln National shares added 32.8% to $9.15. Genworth shares climbed 11.5% to $2.33.

The NYSE Financial Sector Index closed up 1.1% to 3,047, but bearish analyst sentiment on upcoming bank earnings and the Federal Reserve's gloomy economic forecast were weighing on the sector.

Oppenheimer analyst Chris Kotowski, in an industry note published Wednesday, says he expects further writedowns, charge-offs and loan loss provisioning at banks including Morgan Stanley ( MS), JPMorgan Chase ( JPM) and Bank of America ( BAC) to weigh on results. JPMorgan is expected to report earnings April 16 and BofA is set to offer results on April 20.

Morgan Stanley shares closed down 2.7% to $22.69. JPMorgan's stock closed up 18 cents to $27.43. BofA shares fell 4.1% to $7.06.

Citigroup shares closed down 2.2% to $2.70.
This article was written by a staff member of TheStreet.com.