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) government-assisted purchase of Wachovia ( WB).

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) and its subsequent sale to JPMorgan Chase ( JPM).

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) 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.

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