From Reuters:
* Fannie Mae, Freddie Mac shares rise early, then settle
* Day traders 'playing until the game stops'
(New throughout, adds byline)
By Elinor Comlay and Jonathan Spicer
NEW YORK, Aug 25 (Reuters) - Day traders helped drive up
the price and volume of Fannie Mae (FNM.N) and Freddie Mac
(FRE.N) shares for a second consecutive day on Tuesday, looking
to turn a quick profit and spurred by the prospect of
collecting rebates on the low-priced household names.
The shares of the U.S. government-controlled mortgage
lenders jumped early and closed only moderately higher for a
fourth straight day, despite no material news. Two-day trading
volume in Fannie and Freddie was the highest in several
months.
The pattern was more pronounced on Monday, suggesting day
traders were piling in after each other to seize on a trend
that may not last long, traders and observers said.
"A lot of guys are playing until the game stops. The shares
have been opening up every morning and there's kind of a
pattern to that," said Scott Dreyer, managing partner at
boutique broker-dealer Compass Point Research & Trading, which
specializes in financial stocks.
Fannie rose as much as 24 percent, while Freddie gained as
much as 14 percent in morning trading. They closed up 9.4
percent at $1.86 and up 0.5 percent at $2.06, respectively.
"They're gapping open every morning just on the overnight
news that the world is getting better," Dreyer said. "For the
day traders, this goes back to the way they used to trade the
tech stocks -- buying them in the evenings and selling them
after they gap open.">>>MORE
