- Consumer Sentiment Falters, Despite Job Growth
- Greek Aid Deal ‘Much Better’ Than Euro Exit: Summers
- Bonus Bloodbath: Europe Banker Backlash Continues
- US Trade Deficit Swells to $48.8 Billion on China Gap
- SEC Reaches Settlement in Bear Stearns Fraud Case
- Israel Likely to Bomb Iran This Year: Political Analyst
- EU Agrees Rules for $700 Trillion Derivatives Market
- The World's Best Beers
- Rep. Bachus Faces Insider Trading Probe: Report
- Clint Eastwood ‘Surprised’ by Reaction to Chrysler's ‘Halftime in America’ Ad
- Bulls Check In to Community Health
- Bank of America’s Worst-Case Scenario Gets More Real
- Tesla Unveils First SUV: Model X
- New York Fashion Week Hits the Runway as Colors Pop
- Mulling Buffett's Stock Advice? Get in With REITs: Fund Managers
- LinkedIn Earnings Bode Well for Hiring and Social Media
- Top Five Mistakes to Avoid in Online Dating
- Victor Cruz ‘Understands’ Gisele's Super Bowl Frustrations
MOST SHARED
- Users of Citibank Bill-Pay App Charged Twice
- US Trade Deficit Swells to $48.8 Billion on China Gap
- Rep. Bachus Faces Insider Trading Probe: Report
- Euro Sags, Risk Appetite Softens on Greek Deal Holdup
- What's Shaking: Friday's Early Movers
- Israel Likely to Bomb Iran This Year: Political Analyst
- Will Romney Regret Opposing Michigan Auto Bailout?
- FBI Investigated Steve Jobs Drug Use
- Greek Aid Deal ‘Much Better’ Than Euro Exit: Summers
- EU Finance Ministers Won't Get Fooled Again
MOST POPULAR
HOT ON FACEBOOK
Hot Stocks: Brokerages, Fannie Mae Among Big Movers
Text Size 
The beaten-down financial sector got a lift on Monday as shares rose on regulatory speculation and a handful of analyst upgrades.
Financial stocks, as measured by the exchange-traded fund XLF [XLF
Loading...
()
], jumped more than 4% which gave the overall market a boost. The group remains down 9% year to date.
Shares of Fannie Mae were higher on speculation the largest U.S. home funding company could see an easing on lending restrictions by the Office of Federal Housing Enterprise Oversight. Shares of Freddie Mac also advanced on above-average trading volume.
Fannie Mae executives have asked the OFHEO to increase the maximum amount of home mortgages it can hold in its investment portfolio so it can provide more market liquidity, the Wall Street Journal reported Monday afternoon, citing people familiar with the situation.
Calls to Fannie Mae were not immediately returned.
An analyst who covers both Fannie and Freddie said the odds of OFHEO easing restrictions were a "borderline possibility" and probably have no more of a 50% chance of happening.
"All I've heard are rumors, the companies aren't saying anything," said Thomas Mitchell of Miller Tabak. "Without any strings attached and without some specific purpose, I think it's unlikely."
Following accounting problems at Fannie Mae [FNM
Loading...
()
] and Freddie Mac [FRE
Loading...
()
], the OFHEO currently limits the size of mortgage holdings.
Mitchell, who has a "hold" rating on Fannie Mae and a "strong buy" on Freddie Mac, noted that some parts of the mortgage market -- particularly for those with below-average incomes -- have come to a "shuddering halt."
"This is exactly the kind of market environment that these two government-sponsored enterprises were designed to provide relief from," he said.
Meanwhile, UBS upgraded shares of Merrill Lynch to "buy," saying the fallout from the firm's mortgage and credit businesses has been mostly discounted in the stock.
Elsewhere in the financial sector, Wells Fargo [WFC
Loading...
()
] shares rose after the company said its board authorized a 50 million share stock buyback plan.
Electronic Arts [ERTS
Loading...
()
] rose after Bear Stearns upgraded the stock to "outperform" from "peer perform."
"With annual industry growth tracking at the high end of estimates and the potential for operational improvements ahead, we believe Electronics Arts shares are positioned for meaningful upside," wrote analyst Edward Urban.
Urban added that "near-term catalysts" include hardware price cuts and a robust holiday release slate.
Tenet Healthcare [THC
Loading...
()
] gained following a Bear Stearns upgrade of the stock to "peer perform" from "underperform," citing valuation. Tenet is set to report second-quarter earnings on Tuesday morning.
"While we do not anticipate positive results, given the large short position and fairly negative sentiment, should anything positive occur there may be risk of a short squeeze," wrote analyst Jason Gurda.
Peter Kang is a markets writer at CNBC.com and can be reached at .
- How much did the Facebook founder pay for other shareholders' voting rights? Not a heck of a lot, says the NY Times.
- Here’s a look at Westminster Kennel Club’s most successful breeds and how much they cost.
- When looking for that next career move, workers need to look at the differences between a start-up and a public firm.
- After enduring the recession, many Baby Boomers say money isn’t the most important thing they hope to leave to their kids.
- The ‘Fast Money’ traders weigh in on fashion related stocks from apparel to footwear to accessories and fragrances.
- Attention, online shoppers. The days of tax-free online shopping may be coming to an end in many states.
Data is a real-time snapshot *Data is delayed at least 15 minutes
