Fannie, Freddie Drag Down Stocks

Mortgage and Lending with Coastal Funding Corporation NMLS: 103035

By Peter A. McKay Word Count: 780  |  Companies Featured in This Article: Fannie Mae, Freddie Mac, General Motors, Hewlett-Packard, financial sector, Lennar, D.R. Horton, Toll Brothers

Renewed worries about troubled mortgage lenders Fannie Mae and Freddie Mac sank the financial sector, which in turn led the broader stock market lower Monday.

The Dow Jones Industrial Average was recently down nearly 186 points, off 1.6%, at 11473.53. Each of its financial components declined at least 3%. General Motors tumbled nearly 6% and Hewlett-Packard declined more than 3%.

Fannie and Freddie plummeted more than 18% each in the wake of a Barron's article saying that it is increasingly likely that the Treasury Department will recapitalize the two giants, a move that would render the holdings of existing shareholders ...

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