Citigroup shares dived in pre-market trading on Friday after the bank confirmed that U.S. taxpayers would take on a bigger share of the bank as the U.S. government sought to bolster its capital.

Citigroup (nyse: C - news - people ) and the government have reached a deal to convert up to $25.0 billion in government-held preferred shares in the bank into common equity, the bank confirmed Friday. The deal would see the government's voting stake in Citigroup rise to as much as 36.0%, from the current level of 7.0%. This will be accompanied by an infusion of new members on the bank's board, giving it a majority of independent directors, the bank's chairman Richard Parsons said Friday.

Shares of Citigroup plunged 38.2%, or 94 cents, at $2.46, in pre-market trading Friday, suggesting investors feared further dilution of their shareholdings.

They fell from some of the most powerful positions on earth.

The bloodletting in the c-suite started in 2007. It still hasn't stopped.

Another year goes by and more chief executives get the ax--probably more than in any previous year. People shook their heads when Charles Prince III at Citigroup (nyse: C - news - people ) and Stanley O'Neal at Merrill Lynch (nyse: MER - news - people ) got the boot in 2007. Now it look like they were lucky. They got out just in time.

Martin Sullivan of American International Group (nyse: AIG - news - people ) (let go in June), Kerry Killinger at Washington Mutual (nyse: WM - news - people ) (September) and Richard Fuld of Lehman Brothers (nyse: LEHMQ - news - people ) (leaving next month) are among the biggest names to be shown the door as a result of the economic crisis.

Their distinguished company includes James Cayne of the now-deceased Bear Stearns and Richard Syron and Daniel Mudd, the former CEOs of the mortgage buyers Freddie Mac (nyse: FRE - news - people ) and Fannie Mae (nyse: FNM - news - people ).

"There are two kinds of CEO firings," says Noel Tichy, a professor at the Ross School of Business at the University of Michigan. "There are the crooks and there are the incompetents." This year the biggest departing names all fell into a gray area in between.

None was as corrupt as the executives embroiled in the infamous Enron and Tyco scandals of a decade ago, but you couldn't just say they were simply stupid either. CEOs in the financial services industry discovered that they had allowed their companies to take suicidal risks with other people's money based on bad or staggeringly incomplete information. Many of them have paid with their jobs.

In Pictures: 11 Top Bosses Who Got The Boot in 2008

Despite their prominence, these headline names compose just a small fraction of the 1,361 U.S. CEOs who left their jobs this year through November. That's up from 1,356 in all 12 months of last year. The final 2008 number may prove to be a record, beating the previous one of 1,478 set in 2006, according to data collected by the management consulting firm Challenger, Gray & Christmas.

Wipro Technologies Ltd. plans to buy Citigroup Inc.'s India-based information technology business for $127 million in cash, the companies said Tuesday.

The deal comes amid a broad restructuring at Citigroup (nyse: C - news - people ) as the New York financial giant struggles through the worst banking crisis in decades.

The company avoided collapse in November by securing another $20 billion lifeline from the government and has also announced plans to sell banking units in Japan and Germany.

Citi Technology Services Ltd., based in Mumbai, provides IT services for Citigroup's operations in more than 32 countries, Citigroup said.

As part of the deal, Citi will award Wipro (nyse: WIT - news - people ) a contract worth at least $500 million in revenue over the next six years to provide technology infrastructure and application development services. The companies expect the deal to close by March 2009.

Citigroup said the business has about 1,650 employees and is projected to generate $80 million in revenue for 2008.

Wipro shares added 32 cents, or 4 percent, to $8.40 in midday trading, while Citigroup shares fell 18 cents, or 2.6 percent, to $6.57.

DUBAI, United Arab Emirates

The Saudi prince who owns a double-decker "flying palace" and recently raised his bet on Citigroup lost $4 billion in the past year, according to a published report Sunday, showing that even the ultra-rich are getting pinched by the global financial crisis.

The pain is relative, of course. Prince Alwaleed bin Talal remains the world's richest Arab with a net worth of about $17 billion as of Dec. 2, Dubai-based magazine Arabian Business reported in its annual ranking. That is nearly twice as much as the second-richest on the list, but a considerable drop from the $21 billion the magazine said the prince was worth a year ago.

Arabian Business said it based its figure on a direct review of the prince's holdings and a face-to-face meeting with the man who's been dubbed "the Arabian Warren Buffett."

An official at Kingdom Holding Co., Alwaleed's investment company, did not immediately respond to a request for comment.

Alwaleed last month announced he would raise his stake in ailing banking giant Citi to 5 percent from less than 4 percent. The move has failed to significantly boost the bank's share price.

The Saudi royal's controlling stake in Kingdom Holding, which invests in well-known companies such as computer maker Apple Inc. and Rupert Murdoch's News Corp., accounts for nearly $8 billion of his wealth, the magazine said.

Alwaleed also owns Middle East media company Rotana Holding, and controls more than $3 billion worth of real estate, including a 124 acre personal resort complete with a private zoo.

And then there's the Airbus A380 "superjumbo" jet Alwaleed bought and had outfitted for his personal use. It's valued at $330 million -- a little less than the price tag for his other two jetliners combined.

No. 2 on the list with $9.6 billion is Nasser al-Kharafi, a Kuwaiti businessman who holds the Middle East franchise for chains such as KFC, Hardee's and Pizza Hut. He's also the largest shareholder of Krispy Kreme Doughnuts Inc.

Another prominent name on the list: the Bin Laden family, which makes its money in the construction business. Arabian Business puts the net worth of the clan, which has tried to distance itself from its most notorious member, at $7.2 billion -- good for seventh place.

Altogether, the magazine said the world's 50 richest Arabs lost a combined $25 billion amid the global meltdown, much of it since the end of summer like investors elsewhere.

"The surprise is how much money everyone has lost," Anil Bhoyrul, editorial director of Arabian Business publisher ITP Executive Publishing Ltd., said in an interview. "The list we published is a lot different than the list we originally put together only a few months ago."

This is a transcript of the Market Update: Close video report.

Citigroup's Uneasy Victory

The federal bailout calmed the market and seems to fence off Citi's toxic assets. But some investors wonder what it says about the state of other banks

Wall Street barreled higher Monday in a relief rally over the government's plan to bail out Citigroup Inc. -- a move it hopes will help quiet some of the uncertainty hounding the financial sector and the overall economy. The Dow Jones industrials soared more than 500 points and the major indexes all jumped more than 6 percent, extending a steep rally that began Friday.

If the gains held in the final half-hour, the most volatile time of day on Wall Street, it would mark the first two-day gain since Oct. 30-31.

The advance comes even after the markets anticipated last week that some sort of rescue for Citigroup could occur. But investors nonetheless appeared emboldened by the U.S. government's decision late Sunday to invest $20 billion in Citigroup and guarantee $306 billion in risky assets.

Wall Street's enthusiasm surged not only because the bailout answered questions about Citigroup but also because many observers saw the move as offering a template for how the government might carry out other bank stabilizations.

The market rallied following announcement of the plan by the Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corp. to stabilize Citigroup. It's only the latest effort this year to support a banking system troubled by bad debt and flagging confidence. Besides implementing its $700 billion bailout plan for the overall financial industry, the government has bailed out insurance giant American International Group Inc. and taken over lenders Fannie Mae and Freddie Mac.

Jim Baird, chief investment strategist with Plante Moran Financial Advisors, said Wall Street was calmed by the government's decision to help prop up Citigroup but he predicted that the initial enthusiasm could give way to further questions about the effectiveness of the government's array of efforts to sew up problems in the financial sector.

"I think, at a minimum, what you're seeing today is some relief that, first of all, they're stepping in to do something," he said. "There's still more questions than answers surrounding whether what's been done is going be enough."

In the final half hour of trading, the Dow rose 518.03, or 6.44 percent, to 8,564.45.

Broader stock indicators also jumped. The Standard & Poor's 500 index advanced 62.12, or 7.76 percent, to 862.15, and the Nasdaq composite index rose 91.34, or 6.60 percent, to 1,475.69.

The Russell 2000 index of smaller companies rose 31.79, or 7.82 percent, to 438.33.

The rise in stocks follows a rally Friday that saw the Dow industrials jump 494 points, or 6.5 percent. The other major indexes also rose sharply. Still, stocks ended the week with a loss after heavy selling Wednesday and Thursday.

Lancz said Friday's rally and Monday's follow-up reflect a renewed sense that Washington is taking steps to help repair the markets and that the scope of selling for much of last week had left the market overdue for a rally.

"The market is looking for some stewardship. It's at least adding to the bleak confidence that investors have," he said, referring to the Citigroup plan as well as the overtures of the still-forming Obama administration.

Bond prices were mixed Monday as investors examined the government's bailout plan for Citigroup. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.36 percent from 3.20 percent late Friday.

The Treasury bill market showed continuing high demand, a sign of investors' caution. The yield on the three-month T-bill, considered one of the safest investments, fell to 0.02 percent from 0.04 percent late Friday.

The dollar was mostly lower against other major currencies, while gold prices rose.

Light, sweet crude rose $4.61 to $54.54 on the New York Mercantile Exchange.

Despite Mondy's gain, Baird said the uncertainty over whether the government's cocktail of direct investments in financial houses and support of debt obligations will prove effective has led to the stock market volatility. The concerns about banks and the broader economy are likely to continue, he said.

"Just the sheer breadth of potential outcomes is very, very wide which I think makes it difficult for investors to determine how do you play it from here."

Stocks briefly came off their highs of the session in the middle of the session, with the Dow Jones industrial average paring its gain from 300 points to 200 points, as President-elect Obama formally named his economic team but didn't offer specifics of an economic stimulus package nor state that he would push back a plan to raise taxes on the richest Americans. He reiterated his goal of creating 2.5 million jobs during the next two years.

Alan Lancz, director at investment research group LanczGlobal, said that while the market might have wanted a firmer commitment against raising taxes, it was too soon for Obama to outline specifics. Lancz expects the new administration wouldn't rush to implement the hikes if the economy appeared too weak.

"There's so many balls in the air right now he'd be foolish to make specific comments," Lancz said, noting that the economic picture could change greatly by Inauguration Day, which is Jan. 20.

Wall Street shrugged off a larger-than-expected drop in sales of existing homes last month as investors instead focus on the government's plans for the financial sector. And while the housing numbers fell short of expectations, Wall Street expected sales would fall sharply after last month's upheaval in the financial markets.

The National Association of Realtors says sales of existing homes fell 3.1 percent to a seasonally adjusted annual rate of 4.98 million in October. That's down from 5.14 million in September.

The financial sector led Monday's advance, fueled by a sense that the government might be developing a more nuanced yet ready-to-apply medicine for financial firms. Citi surged $2.21, or 59 percent, to $5.98 following the government's decision to inject capital into the company. Bank of America rose $2.89, or 25 percent, to $14.37, while JPMorgan Chase & Co. rose $4.33, or 19 percent, to $27.05.

Advancing issues outnumbered decliners by about 8 to 1 on the New York Stock Exchange, where volume came to 1.24 billion shares.

Overseas, Britain's FTSE 100 jumped 9.84 percent, Germany's DAX index surged 10.34 percent, and France's CAC-40 rose 10.09 percent. Hong Kong's Hang Seng index fell 1.59 percent; markets in Japan were closed for a holiday.

Top Story

Deck the Stores with Bargains

Deep discounts on retail prices for apparel, jewelry, electronics, and even opera fail to excite consumers wary of losing their jobs

• Plus: Small Retailers Push
  for Online Sales
  
  

The bargains sweeping America are increasing, and they're not just Citigroup (C) shares under 4 and Dell (DELL) around 9. From apparel to autos, 10% or 20% price reductions no longer cut it—deals of half-off and more are flourishing in a growing number of industries as manufacturers and retailers plot an uncertain future in the midst of a near certain sales calamity.

In other words, anyone willing to spend can pick up some incredible bargains. "We are looking at a pretty deep recession. In this environment, retailers have zero pricing power," says Nariman Behravesh, chief economist for research firm IHS Global Insight. "They are going to be discounting like crazy. We are going to be looking at a pretty nasty Christmas season."

Shoppers will find some of the most aggressive discounts at apparel and department stores. Most chains took heavy blows in October, with department stores seeing an almost 13% sales decline at locations open for at least a year, a closely followed barometer known as same-store sales. J.C. Penney's (JCP) "Biggest Sale of Them All" has some items marked down 60%, and Gap's (GPS) three brands—Gap, Old Navy, and Banana Republic—each currently boast deep discounts, with some items slashed by as much as 70% at Gap stores.

Jewelry Bargains Galore

At a midtown Manhattan Banana Republic outlet Friday afternoon, sales staff outnumbered customers. Agnes Curmi, a 54-year-old mother of four, says the sales don't entice her as much as they once did. "You don't know what's going to come tomorrow," Curmi said. "You don't know if your husband is going to have a job or not."

Apparel is not the only area in which consumers can expect generous discounts. Luxury and discretionary goods such as jewelry, electronics, and sports cars have suffered significant sales declines in recent months, leaving retailers with no choice but to lower prices to help move merchandise. Chicago-based Whitehall Jewelers, which filed for bankruptcy in June, is closing its 375 stores and liquidating $500 million worth of gold, diamonds, and other items, with prices up to 75% off.

While jewelers typically have more control over pricing than other retailers because their inventory turns over less frequently, liquidation sales such as the one at Whitehall have a ripple effect that can make it harder for competitors to maintain profit margins of 50% or more. "It sets up a value expectation and the economy just reinforces that," says Nick White, president of White & Co., a Kentucky-based custom jeweler, who also serves as an industry consultant at Gerson Lehrman Group. With jewelry sales predicted to fall as much as 10% this holiday, from 2007 levels, price drops are inevitable well into next year. Yearend shopping is the most important selling period for jewelers.

Breaking the $400 Threshold

Vying for the same consumers are electronics retailers, which have significantly lowered prices on big-ticket items this season. Popular high-priced electronics such as Blu-ray DVD players and PCs can be had for roughly the same price that an Apple iPhone or camcorder would have cost a year ago. Typically purchased for their features, rather than their brand name, such items as HDTVs, laptops, and portable GPS navigators are being offered by lower-end manufacturers marketing more affordable models.

• 

Wall Street showed its relief Monday over the government's plan to bail out Citigroup Inc. - a move it hopes will help address some of the uncertainty hounding the financial sector. Stocks jumped more than 3 percent, extending Friday's big rally.

While the markets anticipated last week that some sort of rescue could occur, investors appeared emboldened by the U.S. government's decision late Sunday to invest $20 billion in Citigroup and guarantee $306 billion in risky assets. The move by the Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corp. is only the latest effort this year to support a banking system troubled by bad debt and flagging confidence.

Besides implementing its $700 billion bailout plan for the overall financial industry, the government has bailed out insurance giant American International Group Inc. and taken over lenders Fannie Mae and Freddie Mac.

The market is also a little more optimistic because President-elect Obama is set to introduce his economic team on Monday and has called for another economic stimulus. His plan targets saving or creating 2.5 million jobs during the next two years. Any plan is expected to exceed the $175 billion Obama proposed during the campaign.

The moves by the government to again step in and help a troubled bank as well as perhaps the broader economy helped buoy investor sentiment. Still, investors remain cautious because the nation faces a difficult economy and the stock market likely will continue to see volatility.

In midmorning trading, the Dow Jones industrial average rose 317.00, or 3.94 percent, to 8,363.42.

Broader stock indicators also jumped. The Standard & Poor's 500 index advanced 35.29, or 4.41 percent, to 835.32, and the Nasdaq composite index rose 60.83, or 4.39 percent, to 1,445.18.

The rise in stocks follows a rally Friday that saw the Dow industrials jump 494 points, or 6.5 percent. The other major indexes also rose sharply. Still, stocks ended the week with a loss after heavy selling Wednesday and Thursday.

Bond prices were mixed Monday as investors examined the government's bailout plan for Citigroup. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.29 percent from 3.20 percent late Friday.

The Treasury bill market showed continuing high demand, a sign of investors' caution. The yield on the three-month T-bill, considered one of the safest investments, fell to 0.02 percent from 0.04 percent late Friday.

The dollar was mostly lower against other major currencies, while gold prices rose.

Wall Street shrugged off a larger-than-expected drop in sales of existing homes last month as investors instead focus on the government's rescue for Citigroup. And while the housing numbers fell short of expectations, Wall Street expected sales would fall sharply after last month's upheaval in the financial markets.

The National Association of Realtors says sales of existing homes fell 3.1 percent to a seasonally adjusted annual rate of 4.98 million in October. That's down from 5.14 million in September.

Citi shares surged $2.61, or 69 percent, to $6.38 on word of the government's injection of capital into the company.

Health care company Johnson & Johnson said Monday it would acquire Omrix Biopharmaceuticals Inc. for $438 million. The move is aimed at expanding J&J's surgical product unit; J&J will pay $25 per share for the company, an 18 percent premium over Omrix's close Friday of $21.16.

J&J rose 62 cents to $58.97, while Omrix rose $3.41, or 16 percent, to $24.57.

Overseas, in afternoon trading, Britain's FTSE 100 jumped 5.32 percent, Germany's DAX index rose 7.49 percent, and France's CAC-40 rose 7.34 percent. Hong Kong's Hang Seng index fell 1.59 percent; markets in Japan were closed for a holiday.

Copyright 2008 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed

Uncle Sam Pumps Up Citi

Liz Moyer, 11.24.08, 03:40 AM EST

U.S. guarantees bank against losses on $300 billion of its riskiest assets and injects another $20 billion in capital.