Enron

( ENE) is evaluating whether previously declared dividends will be paid on the company's common stock, its cumulative second preferred convertible stock, Enron Capital LLC 8% cumulative guaranteed monthly income preferred shares, and Enron Capital Resources LP 9% Series A cumulative preferred securities. The energy merchant is near collapse after a mammoth decline on Wednesday. Enron's stock plunged 85% to 61 cents a share after its

debt was downgraded and

Dynegy

(DYN)

called off plans to acquire the company. Sources have told

TheStreet.com

that Enron is

preparing a Chapter 11 bankruptcy filing.

Earnings Reports and Warnings

Barnes & Noble

(BKS) - Get Report

reported a third-quarter loss of 8 cents a share, 2 cents better than consensus estimates. The bookseller issued a profit warning this month, saying that fears of terrorism and the war in Afghanistan were keeping shoppers out of malls and stores.

Petsmart

(PETM)

posted third-quarter earnings of 5 cents a share, a penny ahead of the two-analyst consensus carried by First Call. Sales increased 10.6% to $598.6 million. The company also said Chief Financial Officer Jim Daniel will resign to pursue a career as a financial and business consultant. Daniel took over the post in June.

Mergers, Acquisitions and Joint Ventures

XO Communications

(XOXO)

signed an agreement to receive a total of $800 million from

Forstmann Little

and

Telefonos de Mexico

( TMX), or Telmex, in exchange for new equity in the company. Each group will invest $400 million in XO, according to the terms of a preliminary agreement. After the agreement is completed, Forstmann Little and Telmex will each own 39% of the company's outstanding equity. The remaining equity, other than that allocated to employees, will be held primarily by owners of the company's senior notes. As a result, current holders of the company's equity securities will lose substantially all of the value of their investment. XO will also forego the scheduled interest and dividend payments on its unsecured notes and preferred equity securities after Nov. 30.

Analyst Actions

Lehman Brothers cautioned that next year will be challenging for

AOL Time Warner

(AOL)

. Lehman cited the vulnerability of the company's AOL division, weak advertising, difficult comparable numbers, continued organizational change and recent softness at Time Warner Cable.

Morgan Stanley downgraded

Johnson & Johnson

(JNJ) - Get Report

to neutral from outperform. The firm said the good news about drug-coated stents has already been priced in to the stock, and it said Propulsid lawsuits could resurface.

Miscellaneous News

Calpine

(CPN)

said it has no net exposure to Enron or its subsidiaries. Calpine said an agreement is in place that will allow the companies to offset the amounts they owe each other.

J.P. Morgan Chase

(JPM) - Get Report

said Wednesday that it has about $500 million of unsecured exposure to Enron entities, including loans, letters of credit and derivatives. The banking company also confirmed it has additional exposures that are secured, including $400 million in loans secured by the Transwestern and Northern Natural pipelines.

Nvidia

(NVDA) - Get Report

, a graphics processor maker, will replace Enron in the

S&P 500

after the close of trading Thursday. The company is currently a component of the S&P MidCap 400.

After Wednesday's Close

Brocade

(BRCD)

reported fourth-quarter earnings, excluding items, of 5 cents a share, a penny ahead of Wall Street's expectations. Revenue totaled $116.5 million.

FreeMarkets

( FMKT) forecast fourth-quarter revenue and fees of $44.7 million to $46.7 million and operating earnings of 5 cents to 9 cents a share. Analysts are calling for earnings of 2 cents on a top line of $42.9 million.

Microsemi

(MSCC)

posted fourth-quarter earnings of 17 cents a share, before items. The bottom line beat the consensus estimate by a penny. For the first quarter, the company expects sales to increase as much as 2% from the fourth-quarter level of $57.2 million.

Palm

( PALM) said it expects to report second-quarter revenue of $250 million to $280 million, with a loss, excluding items, of about 7 cents a share. Analysts are looking for a loss of 7 cents with a top line of $232.1 million.