Prometheus 6

Fannie and Freddie Shares Slide, Dragging Down Markets
By MICHAEL M. GRYNBAUM

Fannie Mae and Freddie Mac shares plummeted again on Friday — and the broader stock market followed suit — as concern mounted that the government will be forced to take over the beleaguered mortgage finance companies, which some investors fear are at risk of default.

Even after a week of unprecedented losses, the companies’ declines on Friday were the sharpest yet: Freddie Mac shares were down 24 percent from Thursday’s closing price, to $6.08 a share, and Fannie Mae stock fell 28 percent to $9.51 a share, in midday trading after opening sharply lower.

Less than an hour after the markets opened, Henry M. Paulson, the Treasury secretary, said a government bailout was not an immediate possibility.

“Our primary focus is supporting Fannie Mae and Freddie Mac in their current form,” Mr. Paulson said in a statement. “We are maintaining a dialogue with regulators and with the companies.”