Monday morning headlines

Stocks are down: Continued financial worries are among the explanations cited. That includes speculation about insurance giant American International Group posting a loss and an increase in the number of unsold homes reported. The Dow is down about 120 points. Oil is off a bit, falling below $115 a barrel. (Bloomberg)

Merrill reassessing UA deal: Can its $500 million credit facility with MGM be revised, especially after the ouster of United Artists' CEO Paula Wagner? The NY Post reports that Merrill is looking at the possibilities. Meanwhile, MGM has retained Goldman Sachs as a strategic adviser to raise equity for film financing - as well as other alternatives that include a potential sale of the whole place.

By retaining Goldman, MGM hopes to finally raise its own money so it doesn't have to rely on convincing Merrill to give it access to UA's cash. But that may be easier said than done in the current tight credit climate. MGM has tried unsuccessfully to raise equity several times in the past year, though people close to the studio insist it is weeks away from securing its own film-financing deal. Perhaps that's why sources said Goldman also has put together a book that values MGM at $5.2 billion in a sale. A group comprised of Providence Equity Partners, Texas Pacific Group, DLJ Merchant Banking Partners, Sony and Comcast acquired MGM in 2004 for $5 billion.

Wells not in the market:The relatively healthy SF-based bank is unlikely to buy one of its struggling competitors, CEO John Stumpf told the FT (there have been rumors about Wells picking up Wachovia or Washington Mutual). Stumpf said the bank is more interested in insurance-distribution and wealth-management companies.

Higher electricity prices?: The state's three major investor-owned utilities are working with Assemblyman Lloyd Levine, D-Van Nuys, on a plan that would boost rates for about half of California's residential customers. The proposal would allow the frozen rates to increase at the annual rate of inflation but no more than 5 percent a year. From the San Diego Union-Tribune:

Rates for many residential customers, who use the lowest amounts of power, were frozen in February 2001 by legislation responding to a crisis created by a deeply flawed attempt to deregulate electricity. But the rates for customers who use more power have been allowed to increase. “You end up with inequitable cost sharing” and ratepayer complaints, Levine said. He said two utilities, which are unidentified, reportedly “are talking about 30 percent rate increases next year.”

New biz for LAT: Actually, it's the Los Angeles Times Media Group, which is separate from the newsroom operation. Along with other partners, it's launching ZetaBid, which will auction foreclosed homes and other properties - as well as run a Web site where the properties could be viewed. The partners will share fees paid by the buyer on each home sold. It's a way to generate revenue beyond newspaper advertising. (LAT)