Freddie Mac Leads Market Advances
Stocks in America advanced for a third day after consumer prices climbed less than forecast and Freddie Mac's results bolstered speculation the worst credit-market losses are over.
Freddie Mac, the second-largest American mortgage-finance company, rallied the most in six weeks after reporting a smaller loss than analysts estimated. Macy's Inc. spurred gains in retailers on sales that topped projections. Nine of ten industry groups in the Standard & Poor's 500 Index rose as the Labor Department's April inflation report gave the Federal Reserve more leeway to stimulate the economy.
The S&P 500 trimmed its 2008 loss to less than 4.1% as the consumer prices data overshadowed disappointing forecasts from Deere & Co. and Electronic Arts Inc. Freddie Mac's report helped spur gains in 20 of 30 companies in the S&P 500 Diversified Financials index. Stocks slipped from their highs of the day as a drop in oil prices dragged down energy shares and Apple Inc. retreated 2%, paring the Nasdaq's gain.
Freddie Mac gained $2.29, or 9.2%, to $27.25. The mortgage-finance company's net loss was 66 cents a share, compared with the 84-cent average estimate of 11 analysts surveyed by Bloomberg. Freddie Mac also said it will raise $5.5 billion in capital and doesn't plan to cut its dividend.
Larger rival Fannie Mae advanced $1.77 to $29.89.
