U.S. stocks and exchange traded funds (ETFs) opened the morning in negative territory on news that several l major banks will be selling shares of common stock to repay funds borrowed from the federal government.

US Bancorp (USB) plans on selling $2.5 billion of stock, Capital One Financial (COF) plans on selling $1.55 billion, BB&T Corp (BBT) plans on selling $1.5 billion and KeyCorp (KEY) plans on selling $750 million, states Jonathan Stempel of the Associated Press.

This news comes after the federal government released the stress test results indicating that several financial institutions will need to raise extra capital to comply with regulations. In addition to this, regulations in executive pay are convincing to view TARP as a negative thing and want to pay back borrowed funds and cut all ties with the program. This sent the Financial Select SPDR (XLF) down nearly 3% in morning trading.

On a different note, the White House announced that its forecast for the U.S. budget deficit for the current year has increased by $89 billion because of skyrocketing unemployment claims and corporate bailouts. The estimate puts the deficit at $1.84 trillion, a whopping 12.9% of GDP.