This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

American Capital Agency Falls: Fed Loser

Stocks in this article: AGNC XLF

NEW YORK ( TheStreet)-- American Capital Agency Corp. (AGNC) was one of big losers in financial stocks Wednesday on concerns the Federal Reserve is nearing the time when it will begin reducing its $85 billion monthly bond-buying program.

AGNC turned downward following the Fed's 2pm announcement outlining criteria for which it would begin to curb its stimulus program. Fed Chairman Ben Bernanke stopped short of issuing a timeline but said that as the economy shows signs of improving, the bank will consider cutting back on the bond-buying that has helped to drive stocks.

AGNC spent much of the day higher on Wednesday until the Federal Open Markets Committee statement. While the S&P 500 tumbled 1.4% to 1,628.93, AGNC shares were hit especially hard, falling 3.6% to $24.44 on volumes of more than 21.5 million shares, nearly three times the stock's daily three-month average of 8.36 million shares.

AGNC is a mortgage real estate investment trust (REIT), that borrows short-term to buy longer-dated mortgage backed securities (MBS). When interest rates rise, and they did following the Fed's announcement, that harms AGNC's business. That's because borrowing costs go up quickly, while the longer-dated MBS on its balance sheet decline in value.

During a press conference Wednesday, Bernanke said the Fed would consider tapering its bond purchases later this year, while ending mid-2014, according to a note from CRT Capital Group.

Other financial stocks were down virtually across the board, with the widely-followed exchange traded fund, Financial Select Sector SPDR (XLF) dropping 1.33% to close at $19.60. That is well within the trading range it established May 14 of between $19.33-$20.1.

-- Written by Dan Freed in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,568.11 +211.24 1.22%
S&P 500 2,034.67 +21.78 1.08%
NASDAQ 4,700.8980 +56.5860 1.22%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs