June 03, 2009

Financial stocks came under pressure Tuesday as several big banks scrambled to raise capital to help repay government bailout funds. A negative outlook on the sector from Moody's also weighed on stocks.JPMorgan Chase & Co., American Express Co. and Morgan Stanley all priced stock offerings at a slight discount on Tuesday, while Goldman Sachs Group Inc. sold part of its stake in Industrial & Commercial Bank of China.

The moves came as the banks try to prove to regulators that they can raise money without relying on guarantees against losses from the Federal Deposit Insurance Corp. Many banks that received federal bailout funds last fall have balked at the increased government scrutiny and restrictions on executive compensation that are contingent to the funding.