And in an unprecedented move, the Fed also created a new commercial paper facility that would buy short-term, highly rated debt, stepping into the corporate debt market in a program that falls outside the $700 billion (401 billion pound) rescue plan approved by the U.S. Congress on Friday.

Financial bookmakers expected the FTSE 100 to open 133 to 270 points lower.

Consumer confidence fell to its lowest in at least four years in September as concerns grew about rising unemployment and an the threat of recession, a survey showed.

The Nationwide Building Society's consumer confidence index fell three points to 50, the lowest reading since the survey started in May 2004.

Companies going ex-dividend Wednesday, including retailers Tesco , Morrison Supermarkets , and Kingfisher will take 2.0 points off the FTSE 100 index.

UK stocks to watch on Wednesday are:

HBOS

Commonwealth Bank agreed to buy struggling HBOS's Australian unit BankWest and other assets for a cheap A$2.1 billion ($1.5 billion), to boost its market share in fast-growing Western Australia.

MITCHELLS & BUTLERS

Robert Tchenguiz, Mitchells & Butlers' largest shareholder, has sold his 25 percent stake in the UK pub group in the latest illustration of how the financial crisis in Iceland is having far-reaching repercussions for UK companies, the Financial Times said.

WOOLWORTHS

Woolworths' woes have deepened heading into the Christmas period as it emerged that the last of the big three credit insurers withdrew cover for suppliers of the retailer, the Financial Times said.

BAE SYSTEMS

The Armour Holdings Products unit of BAE Systems has agreed to pay $30million to resolve charges that it knowingly made and sold defective bullet-proof vests used by U.S. police and emergency workers, the Justice Department said on Tuesday.

BP

A U.S. judge on Tuesday said she lacks legal authority to rewrite BP Plc's proposed $50 million plea agreement with the U.S. government to resolve criminal liability for a deadly 2005 Texas refinery explosion despite victims' assertions that it is too lenient.

Also, TNK-BP , which recently resolved a protracted dispute between its British and Russian owners, will remain a major player in the Russian energy sector, the company's outgoing chief executive Robert Dudley said on Tuesday.

AIRLINES

Virgin Atlantic reported on Tuesday a jump in pretax profit to $125.9 million (72 million pounds) for the first half of its fiscal 2008/2009 on higher passenger traffic and stronger revenues.

J SAINSBURY

The food retailer is due to issue a trading update.

COMPUTACENTER

The IT services firm is scheduled to release first half results.

SPEEDY HIRE

The hire company is due to issue a trading update.

UK RECRUITMENT

British recruiters reported the weakest job market for permanent employees since October 2001 in September and highlighted the extent to which a slowing economy was keeping wage inflation subdued, according to the KPMG/REC Report on Jobs.

TODAY'S UK PAPERS

> Financial Times [PRESS/FT>

> Other business headlines

(Reporting by Jon Hopkins)