Another day and still no news of an awaited and feared government bailout of
mortgage intermediaries Fannie Mae and Freddie Mac. No news is good news for the
mortgage giants, as their shares rose for the third straight day on Wed.,
with Fannie gaining 15.30% to close at $6.48 and Freddie jumping 19.65% to close
at $4.75.
Continue reading below
Fannie and Freddie had a little help from Merrill Lynch & Co.
analyst Kenneth Bruce, who wrote in a research note Wednesday that speculation
about a government capital infusion is "somewhat premature" as the companies'
capital cushion should hold up "for several quarters."
Lehman
Brothers Inc.'s shares had a big bump Wednesday, ticking up 5.13% to
close at $14.75 as news surfaced about the potential take out of the battered bank's asset management unit. The Financial Times
reported
that potential bidders circling the potential deal include private equity firms Kohlberg Kravis Roberts & Co., Hellman &
Friedman LLC and Bain Capital LLC. Lehman is still
weighing the decision of whether or not to sell the unit.
Deal news also helped bolster stocks outside of the financial
sector. Ikon Office Solutions Inc. climbed 9.25% to close at $17 per share on
news that Japan's Ricoh Co. Ltd. said it
would
acquire Ikon for nearly $1.62 billion.
The broader market rallied
on the Commerce Department report of a larger-than-expected 1.3% gain in durable
goods orders for July. The Dow Jones Industrial Average picked up 89.64 points
to close at 11,502.51.
- Michael Rudnick
