Daily Market Update 8/6/08

Mortgage rates moved higher Wednesday after Freddie Mac released disappointing second quarter earnings and warned of more trouble ahead. Freddie reported a net quarterly loss of $821 million, three times analysts estimates, and announced plans to raise additional capital. They also doubled reserves for future loan losses to $2.8 billion, citing rising delinquency and foreclosure figures. Mortgage-backed securities sold off sharply on the news, performing much worse than US Treasuries. Stocks moved lower. Fannie Mae plans to release their quarterly earnings report Friday.

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