Street, don't fear, Fannie Mae and Freddie Mac are still standing
without the government's help. ... How long that will last, however, is another
question.
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The mortgage intermediaries logged solid stock gains on Tuesday on news that Freddie sold $1 billion in five-year debt at nearly 1%
above comparable Treasury notes, a narrower spread than Freddie paid in
August in a $3 billion offering of five-year notes. The narrowed spread
indicates that investor concern has eased somewhat about Freddie's
future. Freddie jumped 14.86% to close at $5.18 per share on Tuesday, and Fannie climbed 8.63% to close at $7.43.
Uncertainty
about Lehman Brothers Inc.'s future does not look to have
eased much despite news that Korea Development Bank confirmed Tuesday
that it is in talks to buy a stake
in the bank, hopefully as a member of an investment consortium. Various
press outlets reported that spokesmen at KDB's Seoul headquarters
confirmed their company is in talks to take a Lehman stake. Lehman's
stock barely budged, inching up 0.25% to close at $16.13 Tuesday.
Sciele
Pharma Inc. was a big gainer among Deal Stocks, skyrocketing 59.16% to
$30.67 as Japanese drugmaker Shionogi & Co. Ltd. agreed Monday to buy it for about $1.42 billion.
Despite the surge in some Deal Stocks, the Dow Jones Industrial Average lost 26.63 points Tuesday to close at 11,516.92. - Michael Rudnick
