Stock indexes soared Monday after the federal government took over troubled mortgage giants Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE), but trading was rocky as investors began the process of identifying winners and losers.
The Nasdaq was emblematic of the day’s trading. The index opened up nearly 2%, fell to a loss of nearly 1%, and rebounded to close with a 0.6% gain. Blue chips fared better, ending the day with gains of 2% or more, but an inadvertent reposting of a six-year-old United Airlines (NASDAQ: UAUA) bankruptcy story by a Florida newspaper briefly sent stocks skidding before recovering after the story proved false.
Fannie Mae and Freddie Mac shares plunged below $1 on news that shareholders could be wiped out under the plans, and market breadth was mixed on uncertainty over how the government rescue will play out.
Tech stocks were equally mixed. Oracle (NASDAQ: ORCL), (NASDAQ: NVDA) and Intersil (NASDAQ: ISIL) lost 4% each on downgrades, and the chip sector (PHI: SOX) ended the day down fractionally.
Cisco (NASDAQ: CSCO) was a big winner, up 5% after being added to Goldman Sachs’ technology growth list.
Research in Motion (NASDAQ: RIMM), Qualcomm (NASDAQ: QCOM) and Apple (NASDAQ: AAPL) fell as the wireless sector continued to lose ground following a warning from Nokia (NYSE: NOK) last week. Apple could announce a new iPod Nano on Tuesday, and may also discuss iPhone sales.
The Nasdaq rose 13 to 2269, the S&P rose 25 to 1267, and the Dow soared 289 to 11,510. Volume rose to 7.33 billion shares on the NYSE, and 2.6 billion on the Nasdaq. Advancers led by a 21-12 margin on the NYSE, and 17-11 on the Nasdaq. Upside volume was 58% on the NYSE, and 48% on the Nasdaq. New highs-new lows were 58-142 on the NYSE, and 76-142 on the Nasdaq.
