NEW YORK--Both Tyco International Ltd. and CIT Group exhaled in relief late Monday when the former successfully spun off the latter in an initial public offering, but a bear market Tuesday caused CIT shares to fall $1, or 4 percent, to close at $22 in its first day of trading on the New York Stock Exchange.CIT fetched $4.6 billion for former parent Tyco when the beleaguered conglomerate divested itself of the finance unit in Monday's IPO. Tyco sold 200 million shares at $23 each, substantially lower than the $25 to $29 a share it had hoped to garner.Although the amount of money raised was well below the expected range of $5 billion to $5.8 billion--and less than half of the $9.5 billion Tyco spent to acquire CIT a year ago--the IPO was a crucial success for the health of both companies.After nearly eroding to below 9,000, the Dow Jones Industrial Average finished the day at 9,007.25, down 102.04 points or 1.1 percent. The Nasdaq was down 45.95 points, or 3.3 percent, to close at 1,357.85.In a related development, Standard & Poor's removed CIT from CreditWatch with a stable outlook. Senior unsecured was upgraded to "A" from "BBB."Tyco needed to unload CIT to reduce its $27 billion debt and to help pay $7.7 billion in debt coming, due over the next 18 months. CIT, as the nation's largest and most diverse finance company with a $48 billion portfolio, is now out from under the shadow of Tyco's ongoing liquidity concerns and other issues.While CIT is a global commercial finance firm in operation since 1908, it is also believed to be the biggest player in the area of factoring, an often-used source of capital for the fashion industry. The company went public in 1997 and was acquired by Tyco in a cash-and-stock deal in July 2001.The overall factoring business is a $50 billion to $60 billion industry, financial experts said, with CIT controlling at least 30 percent of the market.CIT is now free of Tyco, which is embroiled in a number of scandals. Early last month, former Tyco chief executive officer Dennis Kozlowski was indicted by the Manhattan district attorney's office for scheming to avoid $1 million in sales tax on artwork that he purchased. Last Wednesday, prosecutors expanded their probe to include evidence tampering in the case. The criminal probe, according to sources, also has widened to include an investigation of whether other Tyco executives used corporate funds to buy artwork and homes.Tyco's business dealings and balance-sheet accuracy have been under investigation since the beginning of the year following the collapse of Enron and other accounting scandals. As part of its restructuring, Tyco tried to sell CIT but couldn't find a buyer even at what analysts described as fire-sale prices.By being severed from Tyco, analysts said the companies financed by CIT will be more secure and CIT will be better run as a standalone entity rather than as one part of a big conglomerate machine. CIT also is now safe in case Tyco declares bankruptcy.Even at the lower price, the CIT deal was the fourth-largest IPO in U.S. history, an impressive feat given poor market conditions that have led Prada to delay its own IPO three times.

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