Fannie, Freddie Again Spike on Big Volume - TheStreet

Fannie, Freddie Again Spike on Big Volume

Fannie Mae and Freddie Mac opened sharply higher for a second straight day Tuesday.
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NEW YORK (

TheStreet

) --

Fannie Mae

(FNM)

and

Freddie Mac

(FRE)

opened sharply higher for a second straight day Tuesday.

Freddie Mac shares were up 2.19% to $1.63 on volumes of 28 million shares just after the opening bell. That compares to a trailing three-month average daily volume of 24 million shares. Fannie Mae shares were up 5.12% to $1.34 on volumes of 51 million shares, vs. a 39 million share daily average over the past three months.

The surge appears to be a continuation of Monday's rally, following an announcement by the Treasury Department that it had lifted a $200 billion cap on the amount of funding it would provide to the mortgage giants.

Despite the recent surge, Fannie and Freddie common shares are thought by most serious investors to be essentially worthless, as they owe the government a combined $111 billion between them. The shares remain well off their 52-week highs, set in late August.

The stock prices of both companies rallied inexplicably in August and September on surges in volumes, as did shares of other seriously troubled companies like

Citigroup

(C) - Get Report

,

AIG

(AIG) - Get Report

and

MBIA

(MBI) - Get Report

.

--

Written by Dan Freed in New York

.

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