The broad indices ended mixed after the Commerce Department revised its gross domestic product growth estimate for the fourth quarter to 2.4% from the initial estimate of 3.4%. Economists polled by Thomson Reuters had on average estimated the revised fourth-quarter GDP to come in at 2.6%.
The flow of softening housing market reports continued on Friday, with the National Association of Realtors saying its Pending Home Sales Index -- which gauges contract signings -- rose 0.1% during January to a reading of 95.0, but that the index was down 9.0% from the January 2013 reading of 104.4. The December figure of 94.9 was the lowest reading for the index since November 2011.
NAR chief economist Lawrence Yun said continued bad weather in many areas of the U.S. had "inhibited home shopping" for a second straight month, and that a limited supply of homes on the market was a contributing factor, "especially in the West, while credit remains tight and affordability isn't as favorable as it was a year ago."
The KBW Bank Index (I:BKX) was up 0.4%, with all but six of the 24 index components ending with gains.
Fannie and Freddie Simmer
Following gains of 42% apiece over the previous three sessions, shares of Fannie Mae (FNMA) and Freddie Mac (FMCC) settled down on Friday. Fannie Mae rounded off the week with shares rising 2.8% to $4.80, while Freddie's shares were up 0.4% to $4.64.
It was an intense week Fannie and Freddie, the government sponsored mortgage enterprises (GSEs), which were both taken under conservatorship by the federal government at the height of the credit crisis in September 2008.
Fannie Mae on Monday reported fourth-quarter earnings of $6.5 billion and said it would pay dividends totaling $7.2 billion to the government in March. That dividend payment will bring the total amount paid by Fannie to the U.S. Treasury to $117.2 billion, exceeding the government's senior preferred stake in the company of $117.1 billion.
Then investors cheered an important ruling on Wednesday by Judge Margaret Sweeney in the U.S. Court of Federal Claims that the lawsuit against the government by private shareholders of the government sponsored enterprises -- including Bruce Berkowitz's Fairholme Funds -- could proceed to the discovery phase.