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Associated Press
Fannie Mae, Freddie Mac shares climb
Associated Press 08.26.08, 10:38 AM ET
WASHINGTON -
Shares of Fannie Mae and Freddie Mac climbed for a second day Tuesday amid expectations in some Wall Street quarters that the mortgage finance giants will be able to weather the housing storm without a government rescue.
Fannie shares rose 90 cents, or 17.3 percent, to $6.09 in morning trading, while Freddie soared 80 cents, or 24.3 percent, to $4.09.
Freddie Mac (nyse: FRE - news - people ) completed a $2 billion debt sale on Monday, and a Wall Street analyst said the two government-sponsored companies have an adequate capital cushion to absorb billions of dollars in losses from soured mortgages in the near term, meaning a federal bailout could be avoided.
Other analysts, however, continue to express a gloomier outlook.
Concern also has been growing that a government rescue of Fannie and Freddie - whose share prices have plunged in recent weeks - could be costly for scores of investment, banking and insurance companies that hold billions of dollars in their preferred shares.
The two companies had nearly $36 billion in preferred shares outstanding as of June 30, according to filings with the Securities and Exchange Commission.
In the coming weeks, Wall Street will be closely watching the results of several debt auctions by the two companies.
Copyright 2008 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed
Associated Press
Fannie Mae, Freddie Mac shares climb
Associated Press 08.26.08, 10:38 AM ET
WASHINGTON -
Shares of Fannie Mae and Freddie Mac climbed for a second day Tuesday amid expectations in some Wall Street quarters that the mortgage finance giants will be able to weather the housing storm without a government rescue.
Fannie shares rose 90 cents, or 17.3 percent, to $6.09 in morning trading, while Freddie soared 80 cents, or 24.3 percent, to $4.09.
Freddie Mac (nyse: FRE - news - people ) completed a $2 billion debt sale on Monday, and a Wall Street analyst said the two government-sponsored companies have an adequate capital cushion to absorb billions of dollars in losses from soured mortgages in the near term, meaning a federal bailout could be avoided.
Other analysts, however, continue to express a gloomier outlook.
Concern also has been growing that a government rescue of Fannie and Freddie - whose share prices have plunged in recent weeks - could be costly for scores of investment, banking and insurance companies that hold billions of dollars in their preferred shares.
The two companies had nearly $36 billion in preferred shares outstanding as of June 30, according to filings with the Securities and Exchange Commission.
In the coming weeks, Wall Street will be closely watching the results of several debt auctions by the two companies.
Copyright 2008 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed