The company lost 75percent of its market value on Thursday as government talks forfinancing

The company lost 75percent of its market value on Thursday as government talks forfinancing collapsed and bankruptcy loomed. Standard & Poor's said on Friday that it was removing CITfrom its S&P 500 .SPX market index as of July 24 after theclose of trade, replacing it with software maker Red Hat Inc(RHT.N). "It is just going to allow them to pass the next 30 to 60days, but they have exhausted their balance sheet condition sofast that it was kind of breathtaking," said Keith Wirtz,president and chief investment officer of Fifth Third AssetManagement. The company's shares moderated early gains and closed up 29cents, or 71 percent, at 70 cents, after more than doublingtheir price amid hopes of financing. The lender had wanted regulators'permission to transfer assets to its bank unit, but that didnot happen, the source said. The first source added one potential scenario is a sale ofsome assets to raise capital.

The company also is in talks withbondholders about a debt for equity swap, the source said. But the source in the bondholders' group said manybondholders were pursuing a "debt for new debt" exchange andthat a debt for equity exchange was not a real consideration. CIT is in search of $2 billion to $3 billion of financing,according to the source, who declined to be identified becausethe talks were private. "They haven't thrown the towel, and they still are tryingto work very hard to get some sort of funding, but at the endof the day I still think that there is a very high risk of abankruptcy event," said Sameer Gokhale, an analyst at KBW. JPMorgan and Morgan Stanley were in talks with other banksabout a DIP loan, Bloomberg reported. Meanwhile, CIT's bondholders were going to hold anotherconference call on Saturday, a source in the lender'sbondholder group said. Financing talks have turned primarily to arranging for adebtor-in-possession (DIP) loan for the lender in case of abankruptcy, CNBC reported, adding that talks were alsocontinuing for financing out of court.

Bankruptcy, however, is still possible over the next fewdays, and CIT, a 101-year-old lender that services nearly onemillion small- and mid-sized businesses, is continuing to talkwith regulators about the situation, the source said. * CIT turns to JPMorgan, Goldman Sachs for financing Stocks  |  Mergers & Acquisitions  |  Funds News  |  ETFs News  |  France  |  Bankruptcy * Bondholders to hold conference call Saturday * Talks turn to DIP financing - reports * CIT shares moderate gains, bonds up (Adds CIT's removal from S&P 500) By Paritosh Bansal and Jennifer Ablan NEW YORK, July 17 (Reuters) - CIT Group Inc (CIT.N) is intalks with JPMorgan Chase & Co (JPM.N) and Goldman Sachs GroupInc (GS.N) about short-term financing as it looks for ways toavoid bankruptcy, a source close to the company said on Friday,sending the lender's shares and bonds up. I've got it in my head that some crazy things might happen to me, both good and bad."(Editing by Tony Jimenez) Sports. "I haven't really experienced any nightmares over here yet, knock on wood."But watching it on TV my whole life I've seen some crazy things go on.

SportsWatson, who plays mainly on the senior Champions Tour, stayed on track for a record-equaling sixth Open victory while fellow American Woods missed the cut in a major for only the second time as a professional.Although those were the most astonishing examples of the perceived form book being overturned, plenty of others were delivered as tricky winds and intermittent rain swept across Turnberry's spectacular Ailsa Course.Britain's Ian Poulter, runner-up at last year's Open and listed by British bookmakers William Hill as one of the favorites at the start of the week at 28/1, missed the cut by a staggering 10 strokes after carding a nine-over 79.Australian world number seven Geoff Ogilvy, U.S. TURNBERRY (Reuters) - The British Open's renowned unpredictability with its vagaries of weather was sharply highlighted on Friday when Tom Watson, 59, tied for the lead and world number one Tiger Woods missed the cut. "I'm putting well, the ball is running at the holes, so sooner or later it will drop."I know I'm running out of holes, 36 to go, but if they (the putts) start dropping, I'll shoot some good scores."The only thing good about playing the weekend is that I can win the tournament and the more rounds of golf I play, the better."(Editing by Tony Jimenez) Sports. a good fix."Harrington, who won his first British Open in a playoff with Sergio Garcia at Carnoustie in 2007 before successfully defending his title at Royal Birkdale last year, also believed his putting was close to clicking."If I look back at it, I think the longest putt I holed was two feet out there," he said after totaling 29 putts in the round.