06.10.2008 17:23

Before the bell: A sharply lower open is expected.

S&P futures vs fair value: -22.40. Nasdaq futures vs fair value: -37.50.
The Fed continues to address liquidity issues, planning to eventually bring the outstanding Term Auction Facilities (TAF) balances to $900 billion from $450 billion. The TAF aims to improve liquidity by allowing depository institutions to borrow from the Fed using the same collateral that is accepted at the discount window. The Fed will also start paying interest on depositary institutions' required and excess reserve balances. Dollar Libor -- the rate banks charge each other for short-term loans -- remain at highly elevated states, but did decline slightly for all terms except the overnight lending rate. Overnight Libor climbed 37 basis points to 2.37%.
Companies: Drug company Eli Lilly said it would buy ImClone (IMCL), the biotech that produces colon cancer treatment Erbitux, for $6 billion.
Online auctioneer eBay said it would cut one-tenth of its workforce, or 1,000 employees, to streamline its business.