By MarketWatch
SAN FRANCISCO (MarketWatch) -- Financial stocks, which remained strong for much of Wednesday on upbeat sentiments from Federal Reserve chief Ben Bernanke, lost their gains and dipped into the red.
The Financial Select Sector SPDR Fund /quotes/comstock/13*!xlf/quotes/nls/xlf (XLF 14.52, 0.00, 0.00%) closed down 1.1%.
Real estate investment trusts were strong performers within the financial stocks in the S&P 500 Index /quotes/comstock/21z!i1:in\x (SPX 1,105, +14.41, +1.32%) . CB Richard Ellis Group Inc. /quotes/comstock/13*!cbg/quotes/nls/cbg (CBG 17.95, 0.00, 0.00%) , AvalonBay Communities Inc. /quotes/comstock/13*!avb/quotes/nls/avb (AVB 110.39, 0.00, 0.00%) , Apartment Investment & Management Co. /quotes/comstock/13*!aiv/quotes/nls/aiv (AIV 22.10, 0.00, 0.00%) , Host Hotels & Resorts Inc. /quotes/comstock/13*!hst/quotes/nls/hst (HST 14.16, 0.00, 0.00%) and ProLogis /quotes/comstock/13*!pld/quotes/nls/pld (PLD 11.43, 0.00, 0.00%) all pared down earlier gains of more than 4% closing between 1% and 2%. AvalonBay late Tuesday boosted its full-year profit forecast.
Citigroup Inc. /quotes/comstock/13*!c/quotes/nls/c (C 3.91, 0.00, 0.00%) close up 4% Wednesday.
Fed chief Bernanke on Wednesday said the economy has recovered to the point where it can take future fiscal tightening in stride. Read more on Bernanke's speech.
Standard & Poor's Ratings Services was out with an upbeat report on REITs on Wednesday. "While we anticipate gradual, yet choppy improvement in the single-family for-sale market, recent market data suggest that operating fundamentals among public REITs have bottomed and that this area may turn the corner quicker than we expected," S&P said.
American Capital Ltd. /quotes/comstock/15*!acas/quotes/nls/acas (ACAS 5.59, 0.00, 0.00%) shares close up about 9.7%. The private-equity firm and asset manager Wednesday said it has extended the voting deadline of its solicitation of votes to accept a standby plan of reorganization.
Shares of Ambac Financial Group Inc. /quotes/comstock/13*!abk/quotes/nls/abk (ABK 0.56, 0.00, 0.00%) were down more than 39% Wednesday as the stock remained below $1.
The bond insurer late Tuesday warned it has "insufficient capital to finance its debt service and operating expense requirements beyond the second quarter of 2011 and may need to seek bankruptcy protection." The company's senior debtholders have formed a committee and will attempt to steer the company toward a prepackaged bankruptcy filing, Reuters reported.
Shares of Goldman Sachs Group Inc. /quotes/comstock/13*!gs/quotes/nls/gs (GS 147.29, 0.00, 0.00%) held steady following reports it is being sued by Australia's Basis Yield Alpha Fund to recoup the $56 million it lost on Goldman's Timberwolf collateralized debt obligation. Shares closed down 0.7%
Banco Santander /quotes/comstock/13*!std/quotes/nls/std (STD 12.68, 0.00, 0.00%) of Spain on Wednesday said it will pay $2.5 billion to repurchase Bank of America Corp.'s /quotes/comstock/13*!bac/quotes/nls/bac (BAC 13.50, 0.00, 0.00%) stake in its Mexican arm, Grupo Financiero Santander. See full story on the deal.
More Financial Stocks
| Sept. 3, 2010 | Financials rally on relief over August jobs report | |
| Sept. 2, 2010 | Financials rise after jobs, housing data | |
| Sept. 1, 2010 | Financial sector jumps nearly 4% in rally | |
| Aug. 31, 2010 | Financials rebound after FOMC-minutes drop | |
| Aug. 30, 2010 | Financials stocks lead market lower |
Craig Stephen
This Week in China