Market Wrap
The major indexes ended today’s choppy session lower, with energy and materials stocks led broad-based losses on the benchmark S&P 500.
The S&P 500 closed down 9.55 points, or 0.5%, at 1,867.62, retreating further from a record closing level reached on Friday. The Dow closed 67.43 points, or 0.4%, lower at 16,351.25 and the Nasdaq closed lower for the fourth consecutive day, ending down 27.26 points, or 0.6%, at 4,307.19.
Corporate data was mixed today as Urban Outfitters slumped after disappointing earnings, while Macy’s and J.C. Penney rallied after an upgrade from analysts (I wouldn’t get too excited about JCP).
Rumors of the first Google store didn’t do much to stave the sellers in the stock as its shares moved lower by about 1%.
Fannie Mae and Freddie Mac also saw their shares hit today as the well telegraphed news of the end of the government ownership and current function of the two companies came closer to fruition today.
Congressional efforts to shut down bailed-out Fannie Mae and Freddie Mac took a significant step forward today as key senators announced bipartisan agreement on a plan to overhaul the housing finance system.
The proposal would slowly shrink the companies and replace them with a scaled-back government guarantee for mortgages.; more on the details of this plan are due out over the next week or so.
The government too full control over Fannie Mae and Freddie Mac in 2008 as they neared bankruptcy from bad loans they guaranteed prior to the housing crash. I’m still curious what the new plan will look like; but the government will have to create either an agency or entity to back and oversee new mortgages moving forward….Fannie and Freddie back over 90% of all loans in the U.S. and set the lending standards by which most of us borrow money for homes.
Economic data flow remains light for tomorrow’s session; weekly crude oil inventories and a 10-Year bond auction are on tap, both should have relatively minimal impact on stocks.Chat soon,
Jared
