NEW YORK (
) -- The markets rallied late Wednesday on reports of that
is preparing a huge equity offering to repay funds from the Trouble Asset Relief Program.
Dow Jones Industrial Average
rose 51.08, or 0.5%, to 10,337.05, while the
added 4.01, or 0.37%, to 1,095.94. The
jumped 10.74, or 0.49%, to 2,183.73.
Maria Bartiromo said on CNBC's "Fast Money" TV show, that Citigroup is working on a $20 billion equity offering to repay its TARP. She said that the announcement is expected to be made Thursday.
For a breakout of some stocks from a recent "Fast Money" TV show,check out Dan Fitzpatrick's "3 Stocks I Saw on TV."
3 Stocks I Saw onTV
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She said the fear is that the move to repay the TARP would leave Citigroup without enough capital. She said the timing of the move is good because the market has been receptive to recent offerings.
Guy Adami said
must feel the pressure to repay its TARP, either through an offering or earning its way out.
Tim Seymour said the big concern now is the $300 billion in toxic assets that the FDIC has insured for Citibank. "That would be a big concern for the market," he said.
Karen Finerman wondered whether the TARP repayment efforts by Citigroup and
Bank of America
run counter to the government's efforts to get them to increase lending. She said the repayments would shrink their balance sheets and make lending difficult.
Melissa Lee, the moderator of the show, said Citigroup stock started to stabilize in after-hours after it dropped on reports of the equity offering.
Christopher Whalen, managing director of Institutional Risk Analytics, said he thinks Citigroup should be raising capital but not to pay back TARP. He said it's going through with the offering because it wants to be like the other banks have paid back the TARP.
Whalen expressed concerns about the revenue instability and loan loss provisions of the large banks. He said his favorite bets in the financials are the small banks.
Ronald Kruszewski, CEO of
, said Citigroup is going through with the offering because "they want to be what they used to be" and "compete" with the other banks. He said the financial services company doesn't want to lose talent and wants to be "out of the clutches of government."
Shifting to a discussion of the overall market, Lee said the session was marked by a rally in
and a weakening dollar that propped up the commodities trade. Adami said it will interesting to see what happens to the market after Citigroup prices its offering tomorrow afternoon.
Adami said it was hard for him to believe Citigroup could raise such a large amount of capital while at the bottom of the market.
Seymour said the dollar wasn't that weak today, as it was still above its 50-day moving average. He said the commodity stocks started higher at the start of the day and traded well throughout the session.
Terranova attributed today's market action mainly to traders closing out their positions at the end of the year.
Adami expressed his concerns about the recent drop in gold, but Seymour said it's relatively small compared to the big runup in the precious metal. He said gold has been down 8% in four sessions compared to being up in the previous 20 consecutive sessions.
Lee invited Yair Reiner, an analyst with Oppenheimer, to talk about
, which was up 4% on reports that its Tablet will be released in March with a price tag of $1,000.
Reiner said the Tablet will be a revolutionary product that will have a huge impact and put pressure on companies making e-readers, netbooks and desktop PCs. He said the Tablet will allow users to play games, surf the Web, watch online TV and "do all the fun things you would expect from a PC."
In the "Trading the Globe" segment, Seymour said Dubai's debt problems have spread to Europe and countries like Portugual, Ireland, Greece and Spain. He said these debt problems will have an impact on the euro and the European banks connected with the debt.
Lee invited Ronald Shaich, CEO of
, to the show. She said Panera has been the best performing dining stock in the past 10 years.
Shaich said the company continues to perform well despite high unemployment because it is adding value to its product.
In the final trades, Seymour liked Goldman Sachs. Adami liked
. Finerman liked
. And Terranova liked
-- Written by David Tong in San Francisco
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