Updated from 7:08 a.m. EDT

Premarket futures were indicating U.S. stocks would leap higher at the open Monday after the U.S. government said it would take over mortgage giants

Fannie Mae

(FNM)

and

Freddie Mac

(FRE)

.

Futures for the

S&P 500

were up 40 points at 1281 and were 38 points above fair value.

Nasdaq

futures were up 39 points at 1809 and 40 ahead of fair value.

Trading during the previous, Labor Day-shortened week was marked by highly volatile trading and uncertainty about the future direction of the economy. A drop in crude-oil prices failed to stoke significant buying ambition for equities, as traders worried that declining demand for commodities signaled a wide slowdown in growth.

On Sunday, the Treasury Department and Federal Housing Finance Agency said they would temporarily seize

Fannie Mae and Freddie Mac

, replacing the mortgage giants' CEOs, buying preferred shares of the companies and offering additional capital support as Fannie and Freddie wade through increasing home-buyer defaults.

The two government-sponsored entities -- which have issued more than $5 trillion in mortgage-backed securities and credit -- are central to the health of the U.S. home-lending market and are lynchpins of the financial sector. Investment bank

Morgan Stanley

(MS) - Get Report

aided the government in its takeover of the firms.

In other company news, struggling brokerage

Lehman Brothers

(LEH)

announced over the weekend that it would replace two members of senior management as it prepares to lay off between 1,000 and 1,500 employees.

Elsewhere in the financials,

Washington Mutual

(WM) - Get Report

announced a shakeup in its top brass. CEO Kerry Killinger, who oversaw $19 billion in mortgage-related writedowns during his tenure, is stepping down. Alan Fishman, chair of Meridian Capital and president of

Sovereign Bancorp

(SOV)

will take over the chief executive spot.

Cigarette maker

Altria

(MO) - Get Report

said it would buy chewing-tobacco producer

UST

(UST) - Get Report

for about $10 billion in cash.

Looking at the day's economic data, the

Federal Reserve's

measure of July consumer debt is expected to be released this afternoon.

As for commodities, the price of crude oil was up $1.68 at $107.91. Gold gained $13.30 to $816.10.

Longer-dated U.S. Treasury securities were quickly dropping in price. The 10-year was down 28/32 to yield 3.8%. The 30-year was losing 1-1/32, yielding 4.36%. The dollar was gaining on the euro, yen and pound.

Overseas exchanges, including the FTSE in London, the Dax in Frankfurt, the Nikkei in Japan and the Hang Seng in Hong Kong, were making substantial gains.