Fannie Mae, Freddie Mac: "Once Troubled Financials Dominate Trading" (FRE; FNM)

From MarketBeat:

Citigroup and Bank of America have been some of the most actively traded stocks for months. But recently, their financial sector colleagues Fannie, Freddie and AIG also shot much higher in trading volumes.

To wit, Citigroup, Fannie Mae, Freddie Mac, Bank of America, in that order, topped Wednesday’s list of most actively traded issues.

AIG didn’t make the cut yesterday. But its shares have been spotted at the top of the NYSE’s most active list regularly since the were reinvigorated in early August. On Aug. 4, some 7.9 million AIG shares changed hands. (That’s roughly in the ballpark of where a normal trading day had been.) The very next day traders swapped some 134.9 million shares of the stock as they shot up by more than 60%. There was little news to explain the move, but the conventional wisdom was that the runup stemmed from expectations that AIG’s quarterly results — due that Friday — wouldn’t be as bad as once thought. (There were plenty of other theories too.)

Volume in Fannie and Freddie also started to pick up around that time. Investors traded 7 million shares of Fannie on Aug. 4. The next day it was 117.1 million. Fannie trading has gone higher recently, hitting 831.4 million on Monday. The same day Freddie jumped to 386.5 million. For a bit of context, in late July and early August, Freddie volume was in the single-digit millions.

We asked our crack squad of Dow Jones math ninjas to crunch the numbers on these five stocks to find out exactly how much of the entire market action is made up by their trades. Since Aug. 5 — when we saw names like Fannie, Freddie and AIG reawaken — trading in those three stocks, plus Bank of America and Citi, has averaged about 31.5% of the NYSE consolidated volume. At their peak on Monday, these five stocks accounted for nearly 43% of the NYSE consolidated volume. That’s pretty remarkable.

So what’s behind all the action in these shares?>>>MORE