Underperforming financial exchange traded funds were set for a flat open Wednesday as investors eyed an offering of American International Group (NYSE: AIG) shares and a key technical level.

AIG and the Treasury Department said they plan to offer 300 million AIG shares for a total of nearly $9 billion.

The announcement came after a meeting Tuesday during which AIG’s board debated whether to push back the offering due to weakness in the stock, The Wall Street Journal reported. The offering is near the low end of the range earlier envisioned, according to the report. AIG was bailed out by the government in the credit crisis.

AIG is not held in financial ETFs but news on the company can shift sentiment on the sector.

Financial Select Sector SPDR Fund (NYSEArca: XLF) is up 2% this year, compared with a gain of more than 8% for the S&P 500.

The financial ETF has been rising this week to test its 50-day moving average, and a breakthrough in the lagging sector could be a good sign for the broader stock market.

Financial Select Sector SPDR Fund

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