LONDON (ShareCast) - US stocks are marginally lower, with financials leading the way down after Goldman Sachs put the boot into its rivals, saying that Citigroup, Merrill Lynch and JP Morgan face the largest shortfalls from declining values of loans used to finance buyouts.

The Dow-Jones is down 24 at 12,157 and the S&P 500 is virtually unchanged at 1,331. The NASDAQ Composite is up 7 at 2,312.

Insurer American International Group, best known in the UK as the sponsor of Manchester United, lost around one-tenth of its value after auditors found a “material weakness'' in how the company values its credit-default swap portfolio.

Savings and loan company Washington Mutual retreated after Bank of America suggested that its share price was being supported by speculation of a bid that, in the eyes of Bank of America, only has a 25% probability of arriving.

Restaurant group Darden Restaurants was the best performing stock in the S&P 500 after it advised that it expects third quarter earnings per share to be in the 83 to 85 cents range. The news has analysts scrambling to amend their earnings estimates which prior to the announcement were around the $0.77 mark.

Internet portal Yahoo! edged higher when it rejected, as expected, the bid from Microsoft. The board of Yahoo! believes Microsoft’s offer “substantially undervalues” the company, particularly bearing in mind its recent efforts to upgrade its advertising technology, its future prospects and its investment portfolio.

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