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Bruising Day For Banks

A quiet range-bound day ended in the red in the last half hour of trading. What happened? Don't kid yourself—trading was execrable all day: there were almost no bids on the floor. Big names like IBM and Alcoa all dropped in the last half hour.

But financial traders noted that the bank stocks traded horrible in the last two hours, and most blamed it on the fact that Bank of America would be selling securities to repay the TARP tonight rather than Monday.

That in turn pressured Wells Fargo, Citi and others who have not repaid the TARP.

We're talking $18.8 billion in securities that BAC is selling, or nearly 1.3 billion shares. That's increasing the float by 15 percent.

"1.3 billion shares is a lot of money," one trader told me," and keep in mind Wells Fargo, Citi, and others need to do the same thing. So $75 billion-$100 billion of new capital needs to be allocated. That weighs on a market."

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