NEW YORK - Wells Fargo and Morgan Stanley said Thursday they'll try to raise billions in fresh capital, becoming the first major banks to scramble for money after the government said 10 large financial institutions need $75 billion in new funds.

Meanwhile, American Express Co. became the first major financial institution to formally request permission to return federal bailout money provided under the Troubled Asset Relief Program, or TARP.

Wells Fargo & Co. said it's seeking to raise $6 billion by offering common stock to investors. The San Francisco-based bank announced the plans after the government's stress test results showed that Wells Fargo needs $13.7 billion in new capital to withstand a deeper recession.

The stress test results showed that Morgan Stanley needs $1.8 billion in fresh funds. Minutes after their release, the New York-based investment bank said it's seeking to raise $2 billion through a public stock offering.

It said it will also try to raise $3 billion through an offering of senior debt that won't be guaranteed by the Federal Deposit Insurance Corp. Raising capital without federal guarantees is a requirement for banks that want to return TARP funds.

Wells Fargo shares closed down nearly 8 percent at $24.76 on heavy trading volume. In after-hours trading, the stock fell 2.4 percent to $24.17.

Morgan Stanley shares ended 4.8 percent lower at $27.14. The stock fell 0.7 percent to $26.95 in after-hours trading.

Separately, Citigroup Inc. said it's planning to convert an extra $5.5 billion of preferred shares into common stock after the stress tests determined it needs an equal amount in fresh capital.

A conversion would not actually give Citigroup more cash, but it would increase Citi's "common equity," a yardstick being used by the government to measure a bank's ability to absorb losses.

The aim of the stress tests was to see how the nation's 19 biggest banks would manage if the economy gets worse. Officials hope the tests will restore investors' confidence in the battered banking sector. They have said none of the 19 banks will be allowed to fail.

Besides Wells Fargo and Morgan Stanley, banks requiring additional capital are: Bank of America Corp. ($33.9 billion); Citigroup Inc. ($5.5 billion); Fifth Third Bancorp ($1.1 billion); GMAC LLC ($11.5 billion); KeyCorp ($1.8 billion); PNC Financial Services Group Inc. ($600 million); Regions Financial Corp. ($2.5 billion); and SunTrust Banks Inc. ($2.2 billion).

The 10 banks will have until June 8 to develop a plan to raise capital and have it approved by their regulators.

Sung Won Sohn, an economics professor at California State University, Channel Islands, said the moves to raise funds by Wells Fargo and other banks could leave them overcapitalized, "assuming the economy continues to recover."

Meanwhile, American Express and eight other companies won't need new capital. Immediately after the release of the results, American Express chairman and chief executive Kenneth I. Chenault announced the credit card lender has filed a request with the Federal Reserve and the Treasury to repay its $3.4 billion in TARP funds.

American Express chief financial officer Daniel Henry said talks with regulators to return the TARP funds could begin Friday.

"We'll take whatever action we need to take" to pay back the money, Henry said in a conference call with analysts.

Chafing under a litany of government restrictions, major banks including Goldman Sachs, JPMorgan Chase & Co. and Morgan Stanley have said they want to return their share of the $700 billion TARP program. Twelve smaller banks have already repaid funds.

Speaking to analysts Thursday evening JPMorgan CEO Jamie Dimon reiterated his desire to repay TARP funds.

"Obviously, we'll be in that process as soon as we can, and hopefully we'll be allowed to pay it," Dimon said.

Congress approved the TARP program in October as the worsening credit crisis threatened to cause a collapse of the banking system.

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