American International Group (AIG) stock was rising Wednesday, just after European Union leaders indicated support for a ban on speculative bets gains.

On Tuesday, German Chancellor Angela Merkel together with Greece and France agreed to back an initiative to curb the use of credit-default swaps, the insurance-like contracts that are often blamed for the near-collapse of AIG. Also that day, Gary Gensler, the chairman of the U.S. Commodity Futures Trading Commission, criticized credit-default swaps in a speech.

Although neither the U.S. nor Europe have said that they would eliminate the hedging instruments entirely, if investors feel they have fewer protections against declines in bond prices, the borrowing costs for various nations could rise.

It always gets complicated when there are contradictions like this, says Timothy Bestler, senior managing director for When2Trade Group. An investor might think that eliminating part of what a company does would have a negative effect on that company s share price. However, a battered company like AIG may actually benefit from taking fewer risks, he says.

The bottom line: The impact of recent moves to curb credit-default swaps has more to do with the political aspects of a zombie corporation. The same is true for [General Motors] that is, political impacts outweigh the market impact, says Bestler. The companies that would likely face hardship if a ban does progress, are the originators like Goldman Sachs (GS), not AIG.

EQT Corp. Down

EQT (EQT) shares dipped on the news that it plans to issue new stock to fund expansion.

On Tuesday, EQT Corp., a natural gas explorer in Pittsburgh, raised its 2010 production sales growth guidance from 20% to 26%. However, to fund that growth, EQT also announced its plans to offer 12.5 million shares of its common stock. With the proceeds from the offering, EQT intends to accelerate development of its Marcellus shale site, as well as its Huron, Berea shale sites, which are located in Southeast Ohio, West Virginia and Northwest Kentucky. EQT has said that it is working on a plan to re-engineer an existing pipeline network to feed Marcellus gas to East Coast markets, which would likely level a boost to investors if the plan works out.

The cost of this action is the main deterrent, however. The company is raising its capital expenditures estimate for 2010 from $850 million to $1.2 billion. EQT s new estimate includes $900 million for drilling wells, $260 million for pipeline and compression to gather and transport the gas to markets and $40 million for distribution infrastructure projects and other corporate items.

That expense hike has some investors feeling nervous, says Cathy Milostan, an equity analyst for Morningstar. I think they have some good, low-cost Appalachian properties to develop, multiple years of drilling sites in Appalachia and they ve just started to expand drilling activity in the Marcellus region. But the question is: Could those properties be developed successfully?

The bottom line: What we need to see as investors is for them to show that they can successfully drill for gas in the shale deposits in the Marcellus, says Milostan. They would need to test wells in the new acreage and drill successfully with a sufficient gas production rate that would be economic and give evidence that it would be worth their while to increase drilling in that area.