CHARLOTTE, N.C. — Surprisingly large second-quarter losses at Wachovia Corp. and Washington Mutual Inc. revived concerns that the financial sector still has a long way to go before it recovers from the year-old credit crisis.

Investors, growing optimistic after a recent string of upbeat bank results, were jolted Tuesday when Wachovia, the nation's fourth-largest bank, racked up an $8.86 billion loss because of charges and reserves for bad loans.

Washington Mutual, the largest savings and loan, delivered a further blow, swinging to a $3.33 billion loss as it boosted its loan loss reserve to $8.46 billion, betting it will have more soured mortgages.

Both warned of steep cuts — Wachovia said it was eliminating 10,750 positions, including 6,350 current workers. Seattle-based WaMu said it would cut up to $1 billion in expenses by the end of 2009.

Wachovia's results, coming before trading began on Wall Street, initially sent stocks falling. The market revived as the price of oil skidded, so Wachovia's stock rose 27 percent. But with WaMu's results released after the close underscoring the problems in the sector, selling could resume when the market opens today.

"Wachovia's news isn't isolated. I think there is still a structural issue with U.S. banks," said Russell Walker, a risk management professor at the Kellogg School of Management at Northwestern University. "Many of the banks, including Wachovia, are still facing challenges."

The banks' results were especially sobering after better-than-estimated reports from Citigroup Inc., JPMorgan Chase & Co. and Wells Fargo & Co. raised hopes that most of the damage from the credit crisis had occurred. Wachovia's crosstown rival, Bank of America Corp., also managed to beat Wall Street expectations.

Global banks and brokerages already have written down some $300 billion of mortgage-backed securities and other risky investments since the crisis began last year, and there are fears that more write-downs are ahead. Questions remain about which companies will have to raise additional capital going forward, and just how much will be needed.

Many are making sharp cuts to mortgage operations, which got them into trouble during the housing boom by making loans to too many risky customers. On Monday, Wachovia said it will stop offering home loans through brokers. Other big banks, such as Bank of America, already stopped making loans through brokers.

Wachovia's problems stem largely from its acquisition of mortgage lender Golden West Financial Corp. for roughly $25 billion in 2006 at the height of the housing boom. It inherited a deteriorating $122 billion portfolio of Pick-A-Payment loans, Golden West's specialty, which let borrowers skip some payments. The bank has made changes to its loan portfolio since, including tightening underwriting standards and stopping making certain loans.

Excluding $6.1 billion in write-downs to the value of its intangible assets and merger-related and restructuring charges of $128 million, Wachovia lost $2.67 billion, or $1.27 per share. Analysts on average expected a loss of 78 cents per share on revenue of almost $8.4 billion. Last year, the bank earned $2.34 billion, or $1.22 per share.

Wachovia is setting aside $10.96 billion for credit losses. Net charge-offs, loans it doesn't think are collectable, increased to $1.31 billion.

WaMu reported a loss of $3.33 billion, or $6.58 per share, compared with a profit of $830 million, or 92 cents per share, in the year-ago period. Analysts on average expected a loss of $1.05 per share.

WaMu's loan loss reserves increased by $3.74 billion to $8.46 billion. The company set aside $5.9 billion to cover bad loans. Net charge-offs rose to $2.17 billion.