Stocks Open Lower Ahead of Federal Reserve Decision

The Federal Reserve may have few options to revive the economy with interest rates already close to zero. Meanwhile, investors and lawmakers remained distracted by bonuses paid to AIG executives. The Dow lost more than 100 points to 7290 while Nasdaq lost 19 points to 1451.

On the upside

Shares of Sun Microsystems (Nasdaq: JAVA) soared on a Wall Street Journal report that it was talks with International Business Machines (NYSE: IBM) to be acquired for at least $6.5 billion in cash.

Darden Restaurants (NYSE: DRI) posted lower revenues and earnings, but the results beat expectations. Analysts promptly upgraded the stock.

Shares of American International Group (NYSE: AIG) rose above $1 a share on hopes that it may not need additional TARP funds. Meanwhile, a controversy surrounding "retention bonuses" continued to roil the Obama administration.

On the downside

Medicis Pharmaceutical (NYSE: MRX) may face competition for its acne drug after the FDA rejected a petition to block generic copies made by Teva Pharmaceuticals (Nasdaq: TEVA).

MGM Mirage (NYSE: MGM) made a $300 million payment to lenders, but analysts expect the hotel and casino operator to continue having difficulty repaying its $13 billion debt load.

Shares of Alcoa (NYSE: AA) fell for a second day in a row as the nation's largest aluminum producer prepared for a challenging 2009.

In the broad market, declining issues outpaced advancers by a margin of nearly 3 to 1 on the NYSE and by more than 5 to 4 on Nasdaq. The Russell 2000 which tracks small cap stocks lost 3 points to 400.