Stocks lower on Citi woes

Stocks are in freefall mode at midsession on concerns that Citi's negotiations with the U.S. government for extra aid may fall flat.
 
At noon, the Russell 2000 (NYSE:IWM) was down 2.27% while the Dow was down 1.35% and the S&P 500 was down 1.71%.
 
According to The Wall Street Journal this morning, the U.S. government (which has already invested $25 billion in the ailing financial institution) was being asked to increase its aid to Citi by as much as 40%. The government would convert its preferred shares to common shares, which would leave Citi shareholders with a diluted stake, the Journal said. As the day progresses, though, investor fears have resurfaced as to how the Obama administration, which has done little to sooth ongoing market worries, will stabilize the overall banking system.
 
These banking fears, in turn, have hurt tech shares today because of a potential falloff in capital spending...

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