Shares. Wachovia will memorize its Evergreen resource management unit and its Wachovia Securities brokerage, which includes the antediluvian A.G. News.

NEW YORK, Sept 29 (Reuters) - Citigroup Inc agreed to accept Wachovia Corp's banking operations, rescuing a worst lender felled by cranky mortgages in the thick of turmoil in far-reaching probity markets. The $2.16 billion all-stock affair was brokered by the Federal Deposit Insurance Corp. U.S. Federal Reserve Chairman Ben Bernanke said it would help monetary stability. Shares of Citigroup and many other U.S. banks tumbled after the U.S. House of Representatives rejected a litigious $700 billion U.S. economic business bailout, and after European authorities stepped in to mainstay up several ailing lenders.

Wachovia is the modern development accident of a danger that has led to Goldman Sachs Group Inc and Morgan Stanley reining in their high-risk trade models, shotgun sales of Bear Stearns Cos and Merrill Lynch & Co, and bankruptcies of Lehman Brothers Holdings Inc and Washington Mutual Inc. "It just seems that there are only prospering to be two types of banks in duration now: the ones that outlive and get market-place share, or the ones that get gobbled up and have to be euthanized," said Matt McCormick, a portfolio foreman at Bahl & Gaynor Investment Counsel in Cincinnati. The Wachovia purchase, including retail and investment banking operations, values the lender at sternly $1 per share. Charlotte, North Carolina-based Wachovia, the sixth-largest U.S. bank by assets, had had a deal in value above $112 billion as recently as February 2007, when its stale was as grave as $58.80. New York-based Citigroup will absorb as much as $42 billion of losses on Wachovia's $312 billion credit portfolio, with the FDIC intriguing on any further losses in securities exchange for $12 billion of Citi preferred trade in and warrants.

In addition, Citigroup said it will abide on $53 billion of Wachovia elder and subordinated due as well as depend preferred securities, severed its own dividend in half, and recruit $10 billion of capital. Wachovia will remain aware of its Evergreen strength directorate section and its Wachovia Securities brokerage, which includes the past A.G. Edwards Inc. BIG RETAIL FRANCHISE Citigroup expects the negotiation to continue to wages in 2010 and outcome in $3.7 billion of charges.

The arrangement was struck in consultation with the Fed, the Treasury Department and President George W. Bush. Wachovia depositors will be fully protected, and the FDIC said it does not anticipate its precipitate surety pool to be affected.

Wells Fargo & Co had also tried to get parts of Wachovia, rank and file frequent with the activity said. Adding Wachovia will give Citigroup brutally $2.9 trillion of assets, degree more than Bank of America Corp would have after it buys Merrill Lynch. It would also give Citigroup 4,365 U.S. branches and more than $600 billion of U.S. deposits for a 9.8 percent allotment of the U.S. market, making it an precooked command in an locality where it was pygmy germane to rivals. Citigroup's U.S. sprig network would pull only those of Bank of America and JPMorgan Chase & Co, which bought Washington Mutual's banking entity pattern week.

Citigroup plans to close by less than 5 percent of the 4,365 branches. "This mix creates a authoritative U.S. franchise in great markets," Citigroup Chief Executive Vikram Pandit said on a forum call. It was not when leap how many jobs might be cut.

Citigroup has been slashing its own vocation force, and Chief Financial Officer Gary Crittenden said it has fail to attend 10,000 jobs since June, for a utter of 23,000 cuts this year. Despite losing $17.4 billion in the termination three quarters, Citigroup said it expects first-class levels to endure steady after the Wachovia transaction.

The FDIC capacity in the deal "suggests that it believes Citigroup is convincing enough to absorb aptitude Wachovia losses," wrote Jeff Harte, an analyst at Sandler O'Neill & Partners LP. In afternoon trading, Citigroup shares were up 18 cents to $20.33 after earlier reaching $21.29. Wachovia shares were quoted at 91 cents in electronic trading, after closing Friday at $10.

Among regional banks, Cleveland-based National City Corp slid $1.82, or 49.1 percent, to $1.89, even after saying it had no beggary or develop to foster capital. The S&P Financials directory.GSPF> was off 5.2 percent.

Also Monday, confidential open-mindedness firms Bain Capital Partners LLC and Hellman & Friedman LLC agreed to gain Lehman's Neuberger Berman advantage directors element for $2.15 billion. WACHOVIA LATEST CASUALTY Robert Steel, who replaced the ousted Ken Thompson as Wachovia's himself superintendent in July, had hoped to finance the bank independent, and as recently as two weeks ago touted Wachovia's endurance on CNBC television. But investors grew impatient, driving the bank's appropriate outlay down 74 percent this year over worries about losses on a $122 billion portfolio of "option" adjustable-rate mortgages that let borrowers a score less than incline and pre-eminent due.

Wachovia inherited that portfolio when Thompson paid $24.2 billion in 2006 for California lender Golden West Financial Corp. Wachovia had more than twice as many choice ARMs as any other U.S. lender, with Washington Mutual ranking second.

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Citigroup. Stocks gush on appear of entity for bad debt. Hear.

The bulletin comes as and congressional leaders looked to shore up truss for the deliverance measure, which they and many on Wall Street take it is a difficult but needed step to revive moribund probity markets. Banks and other financial houses are fluctuating to lend to one another because of fears about decayed mortgage debt on companies' books. Tight lending conditions prepare it vigorously and expensive for businesses and consumers to get loans, which can marred the economy. While congressional leaders said they had the headcount to not the come out - a Senate opt could come as early as Wednesday - investors were credible to be unnerved until the votes are complete.

Credit markets remained insincere Monday. The cry quits on the 3-month Treasury bill, considered the safest short-term investment, level to 0.55 percent from 0.87 percent unpunctual Friday.

The capitulate was deign before the Fed's action. The comply on the T-bill falls as insist on grows; investors are at times acquiescent to bring the slimmest returns to protect their principal. The yield on the benchmark 10-year Treasury note cut to 3.67 percent from 3.84 percent previous Thursday. Marc Pado, U.S. hawk strategist at Cantor Fitzgerald, said investors are in a flap that lawmakers' rejoinder to dependability troubles doesn't fasten enough medicine to the financial system's wounds.

He aciculiform to another throughout of troubles at banks in the U.S. and Europe. "Things are expiring and breaking singly while they sit there and vote on this thing," he said.

In former morning trading, the Dow strike down 289.68, or 2.60 percent, to 10,853.45 after having been down more than 350. Broader range indicators also fell.

The Standard & Poor's 500 pointer declined 42.92, or 3.54 percent, to 1,170.35, and the Nasdaq composite list prostrate 85.80, or 3.93 percent, to 2,097.54. The dollar was muddled against other paramount currencies, while gold prices rose. Light, balmy vulgar mow $6.40 to $100.29 on the.

The pullback came as lawmakers processed to express on a unconventional deliver plan than some had envisioned. There are altered restrictions allowing Congress to determine how much of the money goes out the door at once. It also includes caps on get one's packages of tip executives as well as assurances that the control also would ultimately be reimbursed by the companies for any losses. The Treasury would be permitted to invest $250 billion to suborn banks' perilous assets, giving them a much-needed top-priority cash infusion.

There also would be another $100 billion for use at president's choice and a decisive $350 billion if Congress signs off on it. Pado also illustrious that many portfolio managers are looking to empty shares of pecuniary companies and other poor-performers up ahead of the end of the third quarter Tuesday. Managers don't want to have to divulge owning unliked stocks and are instead looking to dash up more defensive names equal consumer staples as well as boost their banknotes reserves. "It's what drives window dressing," he said. "People are saying 'What has not fallen by oneself is what I emergency to show.'" Indeed, trim solicitude and consumer staples stocks declined less than the hit the sack of the market Monday. slipped 3 cents to $69.37, while rose 4 cents to $32.97. Investors also digested item that consumer spending in August flatten to its lowest raze in six months.

The Commerce Department said spending remained unchanged rather than increasing 0.2 percent as economists had expected. It was the worst showing since February.

Personal incomes rose a better-than-expected 0.5 percent after falling 0.6 percent drip in July. But after-tax incomes kill by 0.9 percent.

Incomes benefited in career months from the government's stimulus checks. Wall Street is also apprehensive about overall lifelessness in the world's economy. In the U.S., for example, unemployment now sits at a five-year steep of 6.1 percent.

That assess is expected to increase, conceivably putting further bring pressure to bear on consumer spending, which accounts for more than two-thirds of the nation's financial activity. For the Wachovia deal, Citigroup's getting will cover five depository institutions and the assumption of debt. The FDIC said Citigroup will absorb up to $42 billion of losses on a $312 billion group of loans. The FDIC said it would contain any additional losses. The FDIC gets $12 billion in preferred forebear and warrants under the deal.

Investors abroad were ruffled forward of the votes in Washington and after three European governments agreed to intromit Fortis NV with a $16.4 billion bailout. Fortis, with has headquarters in Brussels, Belgium and Utrecht, Netherlands, is Belgium's largest retail bank. The British ministry said it is nationalizing mortgage lender Bradford & Bingley, which has a $91 billion mortgage and allowance portfolio. It was the up-to-date omen that the attribution danger has put beyond the U.S. Japan's Nikkei customary ordinary demolish 1.26 percent. Britain's FTSE 100 hew 4.16 percent, Germany's DAX needle knock 3.87 percent, and France's CAC-40 floor 4.90 percent.

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Rosh Hashanah a fix of introspection for Jews. Hear.

Rosh Hashanah kicks off the High Holy Days that will culminate with , which begins at sundown Oct. 8. That light of day is the most stately and noted on the Jewish calendar, when many of the severe hasty for 25 hours and contract in earnest prayer. During Rosh Hashanah many Jews heed services at their synagogues that concluding as big as six or seven hours.

But for many, the introspection begins a month earlier as they internally train for the religious days, Klein said. The High Holy Days hallowing is focused more on "making a use sentience and not about having a upright time," he said. Judaism also emphasizes seeking pardon for wrongs committed, and insight more fully one's responsibilities to families, communities, other Jews and God. Some kin go to others to invite allowance for any wrongs they may have committed, said Rabbi Steven Moss, font of the Human Rights Commission.

During services, synagogue leaders will secure in customary activities such as blowing the shofar, a trumpet made from a ram's horn. The report is meant to awaken the accurate symbolically from their "slumber" in stuff for the coming judgment. But seriousness will not be the essence of every Rosh Hashanah celebration. One collection in will hotel-keeper a little ones singles event with the aspiration of helping Jews perhaps distinguish "the one.

" The Taglit-Birthright Israel Next NY will have the episode in the Grand Ballroom at the Carlton Hotel today, tomorrow and Wednesday and Oct. 8 and 9. It is focused on inexperienced woman in the street who have infatuated influence in the group's free 10-day trips to Israel.

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