Morgan Stanley & Wells Fargo Down In After Hours

Morgan Stanleydown 6 percent after the close, Wells Fargo down 4 percent as capital raises are announced.

Morgan Stanley will be selling $2 billion in common stock and $3 billion in debt, which will not be backed by the government, and which should be priced before the open tomorrow. There have been reports Morgan may need to raise $1-$2 billion in capital.

Note that the Fed has already said the willingness of the Fed to allow banks to repay TARP money is partly based on the ability to raise debt independent of government-backed guarantees; this is exactly what Morgan is doing here.

Wells Fargo will be offering $6 billion in stock expected to price between $20.50 and $22 a share; there have been reports Wells may need to raise $15 billion in capital.

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