Friday August 8, 03:38 PM
US open: Stocks charge higher as oil dives
LONDON (ShareCast) - Wall Street rallied hard in early deals Friday, shrugging off a much bigger than expected loss at Fannie Mae (NYSE: FNM - news)
to focus on lower oil prices and a stronger dollar.A sharp drop in oil prices helped sentiment, with the September futures contract currently down $2.26 at $117.76 a barrel. The prie had dropped as low as $117.05 earlier, but that was bad news for oil giants Chevron (NYSE: CVX - news) and Exxon Mobil (NYSE: XOM - news) . Across the markets, the Dow Jones (news) has leapt 150 points to 11,585, the tech laced Nasdaq Composite (NASDAQ: news) is up 40 at 2,396, while the broad-based S&P 500 is up 16 at 1,282. Fannie Mae reported higher losses and slashed its dividend as housing market turmoil continued to take its toll on the mortgage finance company. Losses widened to $2.3bn in the second quarter, compared with $2.2bn over the same period a year ago. It said it would cut its dividend to five cents a share from 35 cents as part of a drive to preserve billions of dollars. "Our second quarter results reflect challenging conditions in the housing and mortgage markets that began in 2006 and have deepened through 2007 and 2008," said Daniel H. Mudd, president and chief executive. Earlier in the week, Freddie Mac (NYSE: FRE - news) , also created by the US government to expand the secondary market for mortgages, posted a $1.852bn loss in the three months to June 30. In economic news, second quarter non-farm productivity grew at an annual rate of 2.2%, figures from the labor Department revealed. That's not as much as analysts had hoped for. Meanwhile, rising food and energy prices boosted wholesale inventories by a larger than forecast 1.1% in June, according to the Commerce Department. Sales rose 2.8%, also more than predicted.
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