U.S. Stock Futures Tumble on Speculation Lehman Brothers Faces Bankruptcy

[marmar]

U.S. Stock Futures Tumble on Lehman Bankruptcy Speculation

By Allen Wan


Sept. 15 (Bloomberg) -- U.S. stock-index futures tumbled on concern a potential Lehman Brothers Holdings Inc. bankruptcy will add to banks' $514 billion of subprime-related losses.

Federal Reserve and U.S. Treasury officials met in an emergency session as Barclays PLC abandoned talks to acquire Lehman, the fourth-largest U.S. securities firm until last week. Bank of America Corp. also ended takeover discussions, according to a person with knowledge of the matter.

Standard & Poor's 500 Index futures expiring in December retreated 38.90, or 3.1 percent, to 1,219.60 at 6:07 p.m. in New York. The benchmark index for U.S. equities declined 15 percent this year, led by a 28 percent plunge in financial companies.

``The collapse of this deal casts a dark cloud over Wall Street,'' said Frederic Dickson, who helps oversee $25 billion as chief market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon. ``It also sends a message that the government is getting out of the bailout business and makes financial institutions like AIG and WaMu look even more vulnerable.''

American International Group Inc., the largest U.S. insurer, plunged 46 percent last week and Washington Mutual Inc., the country's biggest savings and loan, dropped 36 percent on concern about their financial health.

Barclays, the U.K.'s third-largest bank, and Bank of America, the biggest U.S. consumer bank, were among the leading candidates to acquire all or parts of New York-based Lehman.

Lehman has lost 94 percent of its market value this year, closing last week at $3.65, after record losses from investments tied to mortgages.

The dollar fell 0.6 percent to $1.4302 per euro at 6:53 a.m. in Tokyo, from $1.4224 in New York late last week. ......(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=aj2YoIEqVGOE&refer=home

[ayeshahaqqiqa]

1. Futures trading

isn't this basically a form of gambling?

The more I think about it, the more I think Great Grandma Louise was right--Wall Street types are liars and crooks. (She lost a bundle in 1929.)

[madrchsod]

2. thinning out the herd

to bad there`s no competition left.