So far this morning, Wall Street is holding steady and financial exchange traded funds (ETFs) appear to be in recovery mode as traders, investors and pundits survey the wreckage that was Monday.

The Federal Reserve meeting, scheduled to take place today at 2:15 Eastern, has gone from run-of-the-mill, to eagerly anticipated. Many are wondering if they’ll reverse course and lower interest rates. The benchmark rate has been steady at 2% in order to fight inflation, but now there’s speculation that rates will be cut to free up cash for banks.

Meanwhile, the Federal Reserve pumped another $70 billion into the nation’s financial system to help ease things, reports Jeannine Aversa for the Associated Press.

Overnight and early this morning, several developments within the financial sector took place that show the markets in various stages of crisis and recovery:

• Goldman Sachs (GS), one of the banks that has looked the best throughout the credit crisis, posted a profit of $845 million for the third quarter, but its year-over-year earnings are down 70%. Even though the results are in the black, which is impressive in this climate, it shows that even the toughest on Wall Street are feeling challenged right now. Revenue fell slightly short of analysts’ expectation, reports Louise Story for the New York Times.

• Barclays is in talks with Lehman Brothers (LEH) about the possible acquisition of some assets. No details have been given. The talks concern its broker-dealer business, which is separate from its mortgage assets, says Landon Thomas Jr. for the New York Times.

• The government is reportedly considering extending aid to American International Group Inc. (AIG). Several ratings agency downgraded the world’s largest insurer, which can add to the amount of money the company has to set aside, Tim Paradis for the Associated Press reports. Investors are afraid that if there’s a failure, it would touch off a wave of financial turmoil.

Affected ETFs:

• Financial Select Sector SPDR (XLF), down 25.6% year-to-date
• Regional Bank HOLDRs (RKH), down 15% year-to-date
• iShares Dow Jones Broker-Dealers (IAI), down 40.4% year-to-date
• First Trust Financials AlphaDEX (FXO), down 20.1% year-to-date
• iShares Dow Jones US Financial Sector (IYF), down 22.1% year-to-date

Tags: Financial, FXO, IAI, IYF, RKH, Sector ETFs, XLF