MarketWatch.com - Pre-Market Indications

Monday, June 16, 2008

Opening View: FCC Staff Reportedly Backs Sirius-XM Satellite Merger Deal

U.S. stock futures are trading flat to higher in early activity, indicative of a potentially mixed start to the regular session. The financial sector is once again the center of attention, with Lehman Brothers (LEH) reporting a $2.8-billion quarterly loss, and American International Group (AIG) ousting its CEO. Elsewhere, staff at the Federal Communications Commission have reportedly recommended approval for the merger between Sirius Satellite Radio (SIRI) and XM Satellite Radio (XMSR). Finally, in other Monday merger news, Applied Materials (AMAT) is haggling with ASM International (ASMI) for 2 of the company's divisions.

Checking in on currencies and commodities, the U.S. Dollar Index is down in early trading ahead of speeches from Federal Reserve Chairman Ben Bernanke and Richmond Fed President Jeffrey Lacker. The index was last seen down 0.59% at 73.71. Elsewhere, gold futures are higher, with the August contract adding $7.90 to trade at $880.90 an ounce in London. In the oil patch, crude for August delivery is higher by 24 cents at $135.72 per barrel, despite indications from Saudi Arabia's King Abdullah that the country would boost production by 500,000 barrels per day.

Turning to equity news, Lehman Brothers (LEH: View sentiment for LEHsentiment, chart, options) reported a second-quarter loss of $2.8 billion, or $5.24 per share. Revenue plunged to negative $700 million from last year's $5.5 billion. Analysts will be closely scrutinizing LEH's report throughout the day for details on its exposure and handling of losing assets and investments. Elsewhere in the financial sector, Dow component American International Group ( AIG: View sentiment for AIGsentiment, chart, options) has ousted CEO Martin Sullivan and replaced him with Chairman Bob Willumstad. Willumstad said in a statement that the insurer will conduct a "thorough strategic and operational review."

The Wall Street Journal is reporting that the merger deal between Sirius (SIRI: View sentiment for SIRIsentiment, chart, options) and XM Satellite Radio (XMSR: View sentiment for XMSRsentiment, chart, options) has received backing from Federal Communications Commission (FCC) staff. According to the Journal, the staff wants to place conditions on the deal to protect consumers from price increases in service and receiving equipment. Per the report, an SIRI/XMSR deal could close within 3 weeks if the companies meet the conditions.

In other Monday merger news, ASM International (ASMI: View sentiment for ASMIsentiment, chart, options) rose sharply in overseas trading after the chip equipment-maker rejected an Applied Materials (AMAT: View sentiment for AMATsentiment, chart, options) offer for 2 divisions. ASMI indicated that it was open to talks, however. Elsewhere, Allied Waste Industries (AW) and Republic Services ( RSG: View sentiment for RSGsentiment, chart, options) are discussing a possible combination of the 2 trash-hauling companies.


Opening View: FCC Staff Reportedly Backs Sirius-XM Satellite Merger Deal

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