Thursday, August 21, 2008

An Up & Down Day Finishes Higher

On Wednesday after yet another strange day for the market, the major market indices finished the day higher.

The Dow rose 68.88 points (0.61%) after being down about 60 points and up more than 100. The S&P 500 rose 7.85 points (0.62%) while the NASDAQ rose 4.72 points (0.20%).

The financials started to move again as reports of a meeting between the U.S. Treasury and Freddie Mac (FRE) were circulated. According to some reports, this was just one of many meetings that has been held since July, and it was not in response to anything specific or called to ask for help.

Fannie Mae's (FNM) CEO, Daniel Mudd, helped the market start to trend higher when he said the concerns about his company's financial position were overblown. "They haven't offered anything and we haven't asked for anything," Mudd said, referring to the federal government in a public radio interview Wednesday morning. "I don't anticipate that they will do that."

The dollar had another strong day and crude oil inventories rose much higher than anticipated, yet oil actually rallied Wednesday in the face of both events. While this will not help prices at the pump, it definitely helped fuel the energy stocks higher on Wednesday.

Fannie Mae and Freddie Mac still remain two of the most volatile and followed stocks, and they will continue to be in the news. There have been various suggestions given as to how to handle both of the firms, yet for the time being, they remain unchanged. Time will tell as to which camp will prevail.

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