Before the bell: Futures lower; AIG, LEH, BCS, MS, JPM, SNDK, LYG ...

Posted Sep 17th 2008 8:13AM by Melly Alazraki
Filed under: Before the Bell, Analyst Upgrades and Downgrades, Deals, Market Matters, JPMorgan Chase (JPM), Alcoa Inc (AA), Kroger Co (KR), Goldman Sachs Group (GS), Morgan Stanley (MS), Amer Intl Group (AIG), Washington Mutual (WM), Economic Data, Lloyds TSB Group plc ADS (LYG), Barclays plc ADS (BCS), SanDisk Corp (SNDK), Lehman Br Holdings (LEH), Housing, Federal Reserve

U.S. stock futures edged lower Wednesday morning after the government announced late Tuesday it would help save AIG. Investors may be relieved with the action on AIG and even the Federal Reserve decision not to move Tuesday, leaving room for a future rate cut, there are still big concerns about the state of financial markets. Investors today will also get data from on building permits and housing starts for the month of August. Oil rebounded today ahead of inventory report to over $93 a barrel.

The Federal Reserve said late Tuesday that it would to lend $85 billionAmerican International Group (NYSE: AIG), taking a 79.9% stake in the company. AIG shares are still sinking 30% in pre-market trading.

Meanwhile, as the government refused to help Lehman Brothers (NYSE:LEH) and the company filed for Chapter 11 Monday, Barclays PLC (NYSE: BCS) said it would buy Lehman's banking and capital markets business for $250 million. Barclays walked away from the deal a few days ago, perhaps waiting for a better price, in what many say BAC should have done with Merrill. BCS shares are up over 5% in pre-market trading, LEH's down over 25%.

Morgan Stanley (NYSE: MS) reported its quarterly earnings early to calm investors, posting better-than expected results. It seems the last two major independent investment houses, Morgan and Goldman Sachs (NYSE: GS), which also reported earning Tuesday, both posted third-quarter profits despite continued chaos in the financial markets.

J.P. Morgan Chase (NYSE: JPM) is reportedly in advanced talks to make a bid for Washington Mutual (NYSE: WM).

SanDisk (NASDAQ: SNDK) turned down a $5.85 billion, or $26-a-share, takeover bid from Samsung Electronics. SanDisk shares rose nearly 50% in pre-market trade.

Britain's HBOS (OTC: HBODY), a leading mortgage lender and a bank which has lost three quarter of its market value this year, is reported to be in talks to be acquired by Lloyds TSB (NYSE: LYG), the U.K.'s biggest provider of checking accounts.
The McClatchy newspaper company announced its second major round of job cuts in three months Tuesday due to "a sour advertising environment."

Select analyst calls: