Yahoo! ( YHOO) rose $2.61, or 12.2%, to $23.96 after activist investor Carl Icahn revived hopes of a Microsoft buyout deal for Yahoo!.

Icahn said he has been in talks for the past week with Microsoft CEO Steve Ballmer, noting Ballmer would be interested in restarting negotiations if shareholders elected Icahn's slate of directors to the board at Yahoo's upcoming shareholder meeting in early August. Yahoo has been under intense pressure from shareholders after it rejected Microsoft's $31 a share offer for the company a few weeks ago.

Fannie Mae ( FNM) and Freddie Mac ( FRE) were tumbling more than 20% at one point after an analyst at Lehman Brothers expressed worries about new accounting requirements that might force both government-formed companies to raise billions of dollars in new capital.

Chipmaker Broadcom ( BRCM) was up $1.88, or 7.2%, to $28.10 in part because of positive research notes from Wall Street analysts. An analyst at Piper Jaffray upgraded the stock to buy from hold, saying investors are underestimating the revenue potential for a few product cycles.

Potential sources of revenue upside include a "key design win" for Nokia's videocore processor, the 3G iPhone for which Broadcom supplies a chip, the migration to high definition video and its impact on Broadcom's sales of set-top boxes and Blu-ray player chips, the analyst said.

A Goldman Sachs analyst also named Broadcom as one of the chip makers most likely to benefit from the strong demand for the 3G iPhone.

Radian ( RDN) skyrocketed 70% before settling down to a gain of 51.9%. Last Thursday, the insurer announced that it paid out less in claims during the second quarter than expected and on Monday it named a new head of its mortgage unit.

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