To: c.hinton who wrote (263446 ) 5/6/2008 1:55:31 PM From: geode00 Respond to of 281500 Street Slips After Fannie Falters Steve Schaefer, 05.06.08, 10:34 AM ET Stocks scuffled in New York early Tuesday, after a woeful earnings report from a would-be savior for the mortgage market. As Wall Street firms have fled the mortgage industry, Fannie Mae and Freddie Mac have come to dominate mortgage investing, but on Tuesday it appears at least one of those firms may itself need rescuing. Fannie Mae reported a first-quarter loss of $2.57 a share, far worse than the 81 cents a share expected by analysts. The mortgage company also said it will raise $6 billion in capital and slash its dividend. Shortly after the woeful report, the Office of Federal Housing Enterprise Oversight, which regulates Fannie and Freddie, said it intends to cut the capital cushion required for Freddie to 15%, from 20%. Shares of Fannie Mae were down $1.95, or 6.9%, to $26.34 to start the day, while Freddie Mac lost $1.42, or 5.6%, to $24.10. The news cast a pall over the broader market, as the Dow Jones industrial average fell 77 points, or 0.6%, to 12,893; the Standard & Poor's 500 dropped 8 points, or 0.6%, to 1,399; and the Nasdaq slipped 9 points, or 0.4%, to 2,455. Shares of Yahoo! rebounded somewhat following Monday's slide, after Chief ExecutiveJerry Yang left the door open for reviving deal talks with Microsoft in published comments. The Internet portal gained 97 cents, or 4.0%, to $25.34 in early trading, while Microsoft's shares fell 7 cents, or 0.2%, to $29.01. (See: "No Results Found For MicroHoo") Oil prices remain a focus, after Monday's jump to new intraday records above $120 a barrel. Goldman Sachs analysts predicted that crude could rise to between $150 and $200 a barrel in the next six to 24 months. Concern over attacks in Nigeria persisted, and tension over Iran's nuclear program contributed to the rise as well. Crude was at $120.39 a barrel, up 42 cents. The dollar was softer against foreign currencies, also supporting oil prices. The euro was up to $1.5545. Transport-related stocks were hurting on soaring oil prices, as the Dow Jones transportation average was down 1.0%. The airline components of the index were notably lower, including American Airlines parent AMR, which fell 15 cents, or 1.7%, to $8.87, and Continental Airlines, which lost 53 cents, or 3.0%, to $17.25. ========= This is what happens after 30 years of right wing tax and stealing. On top of continuing troubles at Countrywide....this might actually be really serious. Jeepers. What happened to the free market efficiencies? Oops.