Fannie, Freddie sink on government rescue fears
Friday July 11, 6:55 am ET
By Alan Zibel, AP Business Writer
Fannie, Freddie shares drop as worries of government rescue build amid ongoing housing woes
WASHINGTON (AP) -- Fears that the government will be forced to rescue Fannie Mae and Freddie Mac could well become a self-fulfilling prophecy.
Shares of the government-chartered mortgage finance giants plummeted Thursday and are trading at levels last seen in the early 1990s. If the prices don't recover, it will be harder for the two companies to raise more money through stock sales to compensate for losses from the housing bust. Investors are afraid their stakes will vanish if the government is forced to rescue the companies.