Wall Street Points To More Losses

September 22, 2008 8:56 a.m. EST

New York, NY (AHN) - Futures slip as investors wait for the government's decision on $700 billion rescue plan, while stocks on Wall Street are set for a lower start on Monday.

On Sunday, the Federal Reserve changed the face of Wall Street by approving the application by Goldman Sachs Group Inc. and Morgan Stanley to become bank holding companies.

The move is considered as one of the steps taken by the government to prevent any fallout following last week's turmoil led by Lehman Brothers' bankruptcy.

Goldman Sachs Group and Morgan Stanley will now be regulated by the U.S. Federal Reserve and could be forced to raise capital to shore up their financial statements.

The Federal Reserve also said on Sunday that it has made similar collateral arrangements available to the broker-dealer subsidiary of Merrill Lynch.

At 8:09 a.m. EDT in New York, S&P futures were trading down by 8.20 points or 0.66 percent at 1,237.80 points, NASDAQ futures was moving down by 10.75 points or 0.62 percent at 1,728.75 points, while Dow was trading lower at 94.00 points or 0.83 percent at 11,265.00 points.

Oil futures continued its upward momentum weakening dollar. A light, sweet barrel for October delivery was trading up by $2.74 a barrel to $107.29 a barrel.

On Friday, the contract had surged by $6.67 to $104.55 a barrel on the New York Mercantile Exchange over rising financial concerns.

In global markets, European shares turned red on Monday, following early morning gains on rising oil prices and weakening earnings speculations from the financial firms.

Asian markets closed higher on Monday after the regulatory bodies in Australia and Taiwan decided to impose a ban on short-selling. A similar step was taken by the SEC and FSA last week.

In currency trading, the yen changed hands at 106.52 yen per U.S. dollar on Monday, after it closed at 106.78 yen late Friday in New York.