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