Updated from 7:02 a.m. EDT

Premarket futures were indicating a sharply lower open for stocks on Wall Street Monday, as traders awaited action by Congress on government support for the financial sector and looked on at

Citigroup's

(C) - Get Report

government-assisted purchase of

Wachovia

(WB) - Get Report

.

Futures for the

S&P 500

were down 19 points at 1196 and were 20 points short of fair value.

Nasdaq

futures were lower by 29 points at 1646 and were 37 points 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. 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.

The FDIC announced early Monday that Citigroup was buying the senior and subordinated debt as well as banking operations of

Wachovia

, in a deal facilitated by the Federal Deposit Insurance Corp. The FDIC said that Wachovia did not fail.

Another

Journal

report said 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.

The credit crisis was also causing turmoil overseas. European governments early Monday arranged rescues of

Bradford & Bingley

,

Fortis

and

Hypo Real Estate

.

Looking at the day's earnings, electronics retailer

Circuit City

(CC) - Get Report

reported a wider second-quarter loss and withdrew its previous 2009 earnings forecast.

Pharmacy chain

Walgreen

(WAG)

, meanwhile, reported profit that rose 13% year over year on strong revenue.

In the pharmaceutical sector,

ImClone

(IMCL)

was still in talks to sell itself to a large drugmaker following a hostile takeout bid from

Bristol-Myers Squibb

(BMY) - Get Report

As for economic data, the Department of Commerce said that in August, personal incomes rose 0.3%, up from a 0.7% decrease in July and above economists' estimates. Personal spending was flat in August, falling short of analyst predictions of 0.2% growth.

In the commodities space, the price of crude oil was declining $4.88 to $102.01 a barrel, and gold was off $6.70 to $881.80 an ounce.

Longer-dated U.S. Treasury securities were rising in price. The 10-year note was up 18/32 to yield 3.79%, and the 30-year was gaining 26/32, yielding 4.32%.

Overseas exchanges, including the FTSE in London and the Dax in Frankfurt, were taking losses. Asian indices such as the Nikkei in Japan and the Hang Seng in Hong Kong closed on the downside.