Premarket futures were indicating a lower open for stocks on Wall Street Monday, as traders awaited action by Congress on government support for the financial sector and watched for continued consolidation among U.S. banks.
Futures for the S&P 500 were down 20 points at 1195 and were 22 short of fair value. Nasdaq futures were lower by 29 points at 1646 and were 37 below fair value.
On Friday, the three major indices started in negative territory but finished at session highs after President Bush said Treasury Secretary Henry Paulson's proposed $700 billion aid package for the financial system would soon pass through Congress. Traders also were contending with the failure of Washington Mutual (WM - Get Report) and its subsequent sale to JPMorgan Chase (JPM - Get Report).
Over the weekend, Congress was finalizing the bailout proposal, according to reports. A report from the Associated Press indicated that the House of Representatives would vote on the bill Monday, and the Senate would follow suit later in the week.Separately, the Wall Street Journal reported Monday that Wells Fargo (WFC - Get Report) and Citigroup (C - Get Report) were in advanced talks about a potential acquisition of Wachovia (WB). Although details of the purchase weren't clear, Wells Fargo appeared to be the lead bidder on Wachovia, the Journal reported. Another Journal report indicated that private equity companies Bain Capital and Hellman & Friedman were in the hunt to buy the Neuberger Berman arm of bankrupt brokerage Lehman Brothers. The Financial Times also reported that insurance firm AIG (AIG - Get Report) was contemplating the sale of 15 of its businesses to repay an $85 billion bridge loan from the Federal Reserve and keep from being taken over by the government.