Two competitive Senate elections were rocked this morning by reports that top candidates were exiting the races.

In Texas, wealthy attorney Mikal Watts (D) announced that he was dropping out of the Senate race, leaving state Rep. Rick Noriega as the presumed Democratic nominee against incumbent Sen. John Cornyn (R).

Rep. Tom Davis (R-Va.) also is reconsidering a planned run for Senate next year, according to published reports. Davis had been planning to run for the seat being vacated by Sen. John Warner (R-Va.).

Democrats believed that Watts, who was scheduled to be in Washington, D.C., this week for a round of meetings with party leaders and interest groups, was capable of running a very strong race against Cornyn because of his ability to self-fund his campaign. Watts already had loaned his campaign several million dollars: His third-quarter Federal Election Commission filing showed a formidable $4.3 million raised from July 1 to Sept. 30 and $8.3 million in cash on hand.

But in a statement, Watts said he was bowing out for family reasons.

“After spending the last several months putting everything into this campaign, I have seen the toll this effort has taken on my young children. For these reasons, my wife and I have made the decision that I will not be seeking the Democratic nomination for the United States Senate in 2008,” Watts said.

“While the decision not to seek the Democratic nomination for the United States Senate has been a difficult one, I know that it is the right one for my family at this time.”

Watts, of San Antonio, has been married for 14 years, and has three children ages 9, 11 and 13. He has been a big Democratic donor and earlier this year hosted a fundraiser at his home for the Democratic Senatorial Campaign Committee. But this was his first run for political office.

Despite a national political environment that has lately tilted Democratic, Texas remains a Republican stronghold. However, Watts’ bank account and willingness to spend his own money immediately positioned him to compete with Cornyn financially should he have beaten Noriega in the March 4 Democratic primary.

Noriega closed the third quarter with $510,000 on hand, compared with $6.6 million for Cornyn.

Noriega and his supporters — mostly grass-roots Democrats based in Texas — have long insisted that Watts’ personal wealth earned from his work as a trial attorney would not translate into political strength. They cited millionaire Tony Sanchez’s defeat in the 2002 gubernatorial race at the hands of Gov. Rick Perry (R).

According to published reports out of Texas, Watts began calling supporters throughout the Lone Star State on Monday to inform them of his decision.

“Mikal called this morning, around 7 a.m., and told me he was pulling out of the race. He cited family reasons,” state Sen. Juan “Chuy” Hinojosa (D) told the Rio Grande Guardian newspaper. “Mikal is very close to his kids and he has never held public office before. It can take a lot out of you.”

Meanwhile, in Virginia, if Davis decides not to run for Senate — washingtonpost.com reported late last night that an announcement could came as soon as this week — it would leave former Gov. Jim Gilmore as the frontrunner for the Republican Senate nomination. Another former governor, Mark Warner, is almost certain to be the Democratic nominee — and he remains the frontrunner in the race to replace Sen. Warner.