Stocks Open Lower as Banks Sell Stock to Raise Money

Investors took profits as several major banks announced stock offerings in order to pay off bailout funds. The Dow lost 127 points to 8446 while Nasdaq dropped 22 points to 1716.

On the upside

Shares of Alabama-based Colonial Bancgroup (NYSE: CNB) continued to rally on hopes that it would receive a capital infusion.

Conseco (NYSE: CNO) posted a profit after the insurer reported improved performance across its entire line of business.

On the downside

U.S. banks announced plans to raise money in order to pay off federal bailout funds. Shares of U.S. Bancorp (NYSE: USB) and Capital One Financial (NYSE: COF) fell sharply.

American International Group (NYSE: AIG) sold its Japanese headquarters to Nippon Life Insurance for $1.2 billion in cash to make a small dent in the more than $180 billion in bailout funds that it had received from the federal government.

China Precision Steel (Nasdaq: CPSL) posted sharply lower revenues and a net loss as global demand for its products fell.

Shares of Physicians Formula Holdings (Nasdaq: FACE) tumbled after the cosmetics company reported revenues that fell by more than half and a net loss.

In the broad market, declining issues outpaced advancers by a margin of nearly 5 to 1 on the NYSE and by nearly 3 to 1 on Nasdaq. The Russell 2000 which tracks small cap lost 8 points to 503.