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Wells Fargo & Co. (WFC) and Morgan Stanley (MS) sold a total of $11 billion in stock Friday morning, each boosting the size of offerings meant to plug capital holes identified by the government's stress tests.

The deals were heavily oversubscribed and dominated by large institutional investors. Both the price and the purpose of the offerings helped spur interest, said Scott Sweet, managing director of research firm IPOBoutique.com. The strength of demand demonstrates the banks can raise capital from private sources, a key requirement of government regulators working to get the industry down the road to recovery.

"They are pricing these secondaries in a favorable way, and investors are surmising that once they raise the required capital, these banks will likely be able to survive a continued recession, or even better, thrive in an improved environment," said Sweet.

Also, Bank of America Corp. (BAC) registered Friday morning with the Securities and Exchange Commission to sell 1.25 billion shares of common stock.

Wells Fargo, of San Francisco, originally set out to raise $6 billion from public investors. It ended up selling $7.5 billion in shares and priced them at the top of its expected range, in a deal managed by JPMorgan Chase & Co. (JPM). The shares were priced at $22, an 11% discount to the stock's closing price Thursday.

Under normal market circumstances, secondary offerings usually price at a 2% to 3% discount.

The Federal Reserve told the bank Thursday it needed to increase its Tier 1 common equity by $13.7 billion by Nov. 9. Wells Fargo hopes to plug the rest of the hole with earnings and other internally generated sources.

Morgan Stanley, meanwhile, sold $3.5 billion worth of stock at $24 a share, a 12% discount to the stock's closing price Thursday. It had set out to sell $2 billion worth.

The bank sold 146 million shares. It said Mitsubishi UFJ Financial Group Inc. (MTU) agreed to buy 25 million shares at the offer price. Morgan Stanley in turn is repurchasing preferred stock it issued to MUFG at 110% of its face value, for the same total price MUFG is paying for the common stock.

MUFG threw Morgan Stanley a lifeline last year following the collapse of Lehman Brothers, investing $9 billion in exchange for a 21% stake in the bank.

Bank of America's upcoming 1.25 billion-share offering could differ from Morgan Stanley's and Wells Fargo's deals. If all of Bank of America's registered stock were sold in one offering and priced between $12 and $13 a share, factoring in a discount, it could result in $15 billion to $16 billion in proceeds. But Bank of America has registered the deal as an At-The-Market, or ATM filing, in which the shares can be sold piece by piece, when market conditions appear welcoming, rather than in one fell swoop. Under such a filing, it's possible for the shares to sell at various prices, and it's possible that the bank won't share all of the shares registered.

The U.S. Treasury said Thursday that 10 of the country's 19 largest financial institutions will be required to raise a combined $75 billion in capital to help them absorb what could be another $599 billion in losses under the stress tests' dire economic scenario.

The move for the first time divided healthy banks from those that may need more help, a reversal of the government's initial policy of not stigmatizing the weak. The key now is for banks to demonstrate they can raise capital from private sources.

"When you have the opportunity to raise capital, you should raise capital," Treasury Secretary Tim Geithner said Thursday. Appearing alongside Federal Reserve Chairman Ben Bernanke and Comptroller of the Currency John Dugan, Geithner said indications from banks was that they are "reasonably confident" they can raise the needed capital.

Bank of America, Citigroup Inc. (C), Wells Fargo & Co. (WFC), GMAC LLC and Morgan Stanley (MS) were told they need to raise capital due to the results of the government's stress tests. Regions Financial Corp. (RF), Fifth Third Bancorp (FITB), KeyCorp (KEY), PNC Financial Services Group Inc. (PNC) and SunTrust Banks (STI) also were told to bolster their reserves.

By contrast, JPMorgan Chase & Co. (JPM), Goldman Sachs Group Inc. (GS), American Express Co. (AXP), BB&T Corp. (BBT), State Street Corp. (STT), MetLife Inc. (MET), Bank of New York Mellon Corp. (BK), US Bancorp (USB) and Capital One Financial Corp. (COF) don't need to raise additional capital.

-By Lynn Cowan, Dow Jones Newswires; 301-270-0323; lynn.cowan@dowjones.com

(Jessica Holzer contributed to this article.)