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Financial Winners & Losers: Freddie Mac

The government-sponsored mortgage lender rung up a huge second-quarter loss, helping sink financial stocks.

Troubled mortgage lender

Freddie Mac


delivered terrible losses for the second quarter placing a pall over the financial sector.

Freddie lost $821 million for the quarter compared to a $729 million profit for the same quarter last year. Revenue slumped to $1.69 billion from $2.34 billion. The lender also set aside $2.5 billion in reserves for expected mortgage delinquencies and foreclosures. The stock plunged 18.3% to $6.57. Fellow government-sponsored lender

Fannie Mae


reports results on Friday and tumbled 14.4% to $11.64.

Merrill Lynch


declined in early trading but then rallied in the afternoon even after analysts slammed the company with negative comments. A Deutsche Bank analyst lowered his profit forecast to $2.30 a share from $2.45 and kept his hold rating. A Bernstein analyst suggested that the company should cut its dividend in light of the additional shares the company has issued. He calculated that Merrill would be on the hook for $2.85 billion in dividends if it didn't reduce the amount. The stock was recently trading down fractionally to $28.08.

Protective Life


shares gave back 10.2% to trade at $34.18 after the insurance and investment product provide lowered its guidance for the year and cited the difficult macroeconomic environment for cars and boats.

Overall the

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Financial Sector Index was recently dropping 72.84 to 6,606.79.

But there were several stocks that were bucking the trend.



shares swelled 17.6% to $31.07 after it reported profits increased 81%, driven by the exchange's expansion through several major acquisitions over the past year. Core trading volumes have been slowing and the company has been pushing itself into global markets and creating proprietary products.

Ambac Financial


shares jumped 17.6% to $5.56 after the bond insurer reported a surprisingly profitable second quarter. The company delivered profits of $823 million or $2.80 per diluted share, although if certain gains were excluded it was actually a loss of $1.53 a share.

Blackstone Group

(BX) - Get Blackstone Inc. Report

turned in a lowered profit for its second quarter, but still managed to beat estimates. Profits fell to $99.9 million, a far cry from the $735.6 million it earned last year. But the company blames accounting rules that make it adjust its assets as if they were being sold today and with the weak markets that puts the figures very low. The stock climbed 4.2% to $18.93.

Fidelity National

(FIS) - Get Fidelity National Information Services, Inc. Report

shares raked in a 17.7% gain after the financial information services company reported that profits fell from the previous year, but that revenue rose from last year. Fidelity also raised its earnings outlook. The stock jumped $3.35 to $22.32.