While the Federal Reserve may have good intentions for Fannie Mae and Freddie Mac, shareholders of the pair of mortgage intermediaries may curse the regulator's name, as their shares each dove over 20% on July 14 -- the first trading day after the Fed and the Treasury devised a
government backstop plan for the companies. On July 24, Fannie and Freddie's shares skidded about 25% and 23%, respectively, the day after the backstop plan was
approved by the House of Representatives. But the words "Federal Reserve" were music to Fannie and Freddie shareholders' ears on Tuesday as their shares soared 14.96% to close at $13.60 and 6.91% to $8.04, respectively, following the Fed's decision to leave the 2% Federal Funds Rate unchanged. The broader market was equally as grateful for the Fed's move, as the Dow Jones Industrial Average skyrocketed 331.62 points to close at 11,615.77.
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A handful of Deal Stocks were in part benefactors of the bullish behavior Tuesday.
Cablevision Systems Corp. ticked up 8.75% to close at $28.20 on news that it is considering strategic alternatives, including a spinoff or dividend payments.
Chemical company Huntsman Corp. gained 4.78% to close at $14.24 per share, following a 2.1% gain on Monday. Huntsman's stock was given a boost by a late-Friday SEC filing by 8% shareholder and hedge fund Citadel Investment Group LLC, in which it offered to provide financing to Hexion Specialty Chemicals Inc. to help facilitate the company's $10.6 billion acquisition of Huntsman. - Michael Rudnick
