Original post:
From Dow Jones (I forget which part of the empire had it first, MarketWatch or the Journal):
Freddie Mac shares jumped in early trading Monday, rallying after the mortgage-finance giant reported a quarterly profit and said it won't have to hit up the government for more financial assistance, at least for now.
Freddie Mac (FRE 1.33, +0.58, +78.72%) rallied more than 60% to start the week. Shares of Fannie Mae (FNM 0.88, +0.21, +31.96%) , which with Freddie Mac has been placed in government conservatorship during the credit crunch, were along for the ride, gaining about 25%.
In the broader financial sector, the Financial Select Sector SPDR Fund (XLF 14.38, +0.03, +0.21%) rose fractionally in morning action....MORE
From the Atlanta Business Chronicle:
Update:Freddie Mac late Friday reported its first profitable quarter in two years and said it won’t need to draw from its Treasury Department line again, at least for now.
The McLean, Va.-based mortgage giant logged a quarterly profit of $768 million compared to a net loss of $9.9 billion in the same quarter a year ago. Including a $1.1 billion dividend payment to the Treasury Department on preferred stock the government owns, it lost 11 cents per share.
More notably, Freddie Mac ended the quarter with a net worth of $8.2 billion.
As a result, no additional funding was required from the Treasury under terms of the government’s investment in Freddie Mac....MORE
From MarketBeat:
What’s Driving the Rally in Freddie and Fannie
Crazy twins Fannie Mae and Freddie Mac are surging Monday. The residential-mortgage companies were lately up 36% and 78%, respectively, though stocks are down on the whole.
Freddie recently surprised with a quarterly profit, its first in two years. But shareholders experienced a loss as the mortgage concern paid the government a $1.1 billion dividend. Freddie indicated it may also survive without additional government aid, at least for now. Fannie, meanwhile, reported a $14.8 billion net loss last week and said it would need more Treasury funds.
Keep in mind that Monday’s pop in percentage gains still leaves Freddie with a share price of about $1.30 and Fannie with a price near 89 cents.
Freddie’s news and various recent economic data snippets in the somewhat-less-awful category have led to “a bit of capitulation on the upside,” said Mike Mainwald, head trader at Lek Securities. “More people get into it, more shorts then have to cover. These little signs that the economy is stabilizing, perking to the upside, gets these companies going.”>>>MORE
