INSTANT VIEW: Citigroup shares crash below $4, CDS widen

NEW YORK (Reuters) - Citigroup Inc shares plunged anew on Friday, breaking through the key level of $4 a share and reversing early gains on the news that the bank was mulling a variety of options to restore the bank's health.

Citi, down as much as 21 percent, was the biggest decliner among big banks, but other big banks were also under pressure. JPMorgan Chase & Co was as much as 12 percent lower.

In addition, the cost to protect Citigroup debt against default rose suggesting that fixed-income investors see increased risk. It cost $425,000 annually to protect $10 million of debt against default for five years, up from $395,000 annually on Thursday, according to Phoenix Partners Group.

The following is reaction from industry analysts and investors:

TIM GHRISKEY, CHIEF INVESTMENT OFFICER AT SOLARIS ASSET MANAGEMENT IN BEDFORD HILLS, NEW YORK

"It's fear that businesses and consumers will stop doing business with Citigroup. It's fear that they won't be a survivor and fear of possibly unknown off balance sheet items or exposures. This is an environment where it's a bit of a witchhunt and we have to have the next victim.

Whether it's the press, or short sellers, or day traders, or investors, (they're) looking for the next victim and making that happen. It's an environment where there is fear and it compounds on itself.

Financially, looking at what we know about Citigroup, its fundamentals and balance sheet, it's no worse than any other major integrated bank. It's fear of what we don't know, and Citi is exposed everywhere.

There's not a lot of 'real' trading going on. What we hear is it's basically day traders, including day traders short selling. They're the ones really whipping the market around."

JEOFF HALL, CHIEF U.S. ECONOMIST, THOMSONREUTERS IFR MARKETS IN BOSTON

"There are a lot of rumors swirling and fears of a potential fire sale. And what seems to be happening now is that potential suitors are not ready to buy but are waiting to see just how low the price can go."

WILLIAM BELLAMY, DIRECTOR OF FIXED INCOME WITH THOMPSON, SIEGEL & WALMSLEY IN RICHMOND, VIRGINIA

"I have a feeling the reason we saw such a rally in the 30-year Treasury bond yesterday was due to the problems at Citigroup."

"The uncertainty surrounding Citigroup is going to plague the markets until it is resolved."

DAVID DIETZE, CHIEF INVESTMENT OFFICER OF POINT VIEW FINANCIAL SERVICES IN SUMMIT, NJ

"Just a month ago the government was providing assistance for Citigroup to buy Wachovia....Now, they're struggling for their life. What happened in four to five weeks?"