Sept. 16 (Bloomberg) -- U.S. stock-index futures retreated after the Reserve Primary Fund fell below $1 a share and investors speculated American International Group Inc. will be seized by the government.

Reserve Primary Fund, a money-market mutual fund with $64.8 billion in assets as of Aug. 31, became the first money-market fund in 14 years to expose investors to losses after writing off $785 million of debt issued by Lehman Brothers Holdings Inc. Investor redemptions will be delayed as long as seven days, the fund said in a statement.

AIG tumbled 37 percent to $2.35 in extended trading at 7:07 p.m. in New York. The largest U.S. insurer by assets may be placed in a conservatorship to address the insurer's crisis, two people briefed on the discussions said. AIG said in a statement that it's still pursuing ``alternatives to increase short-term liquidity'' and won't reduce subsidiaries' capital.

Standard & Poor's 500 Index futures expiring in December lost 2.5 points, or 0.2 percent, to 1,213.7. Dow Jones Industrial Average futures lost 35, or 0.3 percent, to 11,010. Nasdaq-100 Index futures slipped 5, or 0.3 percent, to 1,728.

U.S. stocks rose in regular trading, helping the S&P 500 Index rebound from the steepest drop in seven years yesterday.

VeraSun Energy Corp. lost 17 percent to $4.35. The largest U.S. ethanol producer by capacity said in a filing with the U.S. Securities and Exchange Commission that it may have a net loss of as much as $103 million in the third-quarter because of bad hedging bets. The company plans to sell 20 million shares.

To contact the reporter on this story: Jeff Kearns in New York at jkearns3@bloomberg.net.

Last Updated: September 16, 2008 19:11 EDT