Mid-Day Report

The markets extended its losses during the midday with the Dow skidding 292 points to 10,767 as investors digested the govenment's $85 billion bailout of AIG.  Nasdaq stumbled 70 points to 2138.

On the upside

Ambac (NYSE: ABK) disclosed that its exposure to Lehman Brothers (NYSE: LEH) was insignificant with no direct exposure to the failed investment bank's financial guarantee or financial services investment portfolio. 

The Food and Drug Administration approved Mylan's (NYSE: MYL) generic version of Johnson & Johnson's (NYSE: JNJ) bipolar disorder and schizophrenia treatment Risperdal.

Citigroup analyst Timothy Arcuri upgraded Evergreen Solar (Nasdaq: ESLR) while lowering his earnings outlook after the solar power products company clarified its exposure to bankrupt Lehman Brothers.

On the downside

Oppenheimer Research analyst Joseph Gomes Jr. downgraded VeraSun Energy (NYSE: VSE) after the ethanol maker warned of a third quarter loss of at least $63 million and announced a publice offering of 20 million shares.

Nortel Networks (NYSE: NT) blamed the global economic slowdown for lowering its fiscal 2008 guidance.

Canadian rating agency DBRS lowered its rating on Morgan Stanley (NYSE: MS) to negative citing earnings pressure due to turmoil in the financial services sector.

In the broad market, declining issues outpaced advancers by a margin of more than 13 to 1 on the NYSE and by more than 5 to 1 on Nasdaq.  The Russell 2000 which tracks small cap stocks plummeted 31 points to 680.