Financial sector stocks fell on Friday, despite gains from the leading U.S. insurer, American International Group.

The Financial Select Sector SPDR exchange-traded-fund fell 0.32 points, or 1.3 percent to 24.76 points. The fund tracks financial stocks on the Standard & Poor's 500 index.

AIG shares rose nearly 2 percent after Morgan Stanly upgraded the company's credit rating from overweight to equal weight. An analyst at the Morgan Stanley believes the insurer will not need to raise additional capital, a concern which had previously sent down the stock. AIG closed up 66 cents at $36.00.

In other financial stocks, Goldman Sachs rose 0.1 percent and Lehman Bros. was down 1.5 percent. MasterCard shares also jumped 0.1 percent to $308.65. Morgan Stanley rose 1 percent.