Wall Street retreated today after Fannie Mae and Freddie Mac fell to their lowest levels in nearly 20 years on concerns that the government...
NEW YORK — Wall Street retreated today after Fannie Mae and Freddie Mac fell to their lowest levels in nearly 20 years on concerns that the government might need to bail out the mortgage financiers.
The Dow Jones industrial average fell 180.51 to 11,479.39.
Microsoft, one of the 30 Dow stocks, dropped 12 cents to $27.69. Boeing, another Dow stock, declined 81 cents to $63.64.
The Standard & Poor’s 500 index fell 19.60 to 1,278.60, and the Nasdaq composite index fell 35.54 to 2,416.98.
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Investors were again uneasy about the health of financial companies after media reports of further problems in the sector. Barron’s said the U.S. Treasury might have to bail out government-chartered Fannie and Freddie, which, the weekly noted, would likely wipe out shareholders’ equity in the companies.
Meanwhile, The Wall Street Journal, citing unidentified sources, reported that Lehman Brothers Holdings might surprise Wall Street with weaker-than-expected third-quarter results.
The continuing bad news about financials wasn’t a surprise, but it nonetheless depressed a market that is hoping for concrete signs that banks and brokerages can put the year-old credit crisis behind them and return to significant profit growth.
Even neutral news about the housing market couldn’t ease Wall Street’s mood. The National Association of Home Builders monthly index on the housing market remained flat at 16 in August.
That met the expectations of economists surveyed by Thomson Financial/IFR. Benchmarks related to current sales and expectations of future sales improved, but apparently not enough to move investors to buy.