On Monday, resistance proved futile to downward pressure rather than to upside momentum for a change. The combination of Friday's reversal, Motorola's ( MOT) warning and a shake-up at Freddie Mac ( FRE) sent major stock proxies lower, although traders' propensity to buy weakness surfaced yet again.

The Dow Jones Industrial Average fell 0.9% to 8980, after trading as low as 8945.59 late in the session. The S&P 500 slid 1.2% to 975.93 after trading as low as 972.59, while the Nasdaq Composite shed 1.4% to 1603.97 vs. its nadir of 1597.30.

Although declining stocks led advancers by about 2 to 1 in both Big Board and over-the-counter trading, optimists took solace, because volume was down considerably from last week's levels. About 1.3 billion shares traded on the Big Board and 1.8 billion in Nasdaq trading, indicating somewhat decreased activity on the downside.

All Together, in Opposition

Prices of Treasuries and equities moving in opposition is not unusual, their recent movements in tandem aside. But the catalyst for Monday's action was unique.

News that Freddie Mac's president and chief operating officer, David Glenn, was fired for failing to cooperate with the company's internal audit sent Freddie shares down 16% and weighed on fellow government-sponsored enterprise (GSE) Fannie Mae ( FNM), which lost 4.9%. Two other Freddie Mac executives, Chairman and CEO Leland Brendsel and Chief Financial Officer Vaughn Clarke, resigned.

Earlier this year, Freddie Mac said it would restate results from 2000, 2001 and 2002 after its new auditor, PricewaterhouseCoopers, recommended changes in how the company accounted for derivatives. The changes are expected to "materially increase reported earnings," Freddie Mac reiterated in a press release Monday. But the firm said the restatement process might not be completed until later in the third quarter vs. by the end of the second quarter, as previously forecast.

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