Lender Woes Keep Lid on Gains

Financials rally as outlook darkens for government lenders
By Nick McMaster,  Newser Staff
Posted Jul 10, 2008 3:39 PM CDT
In this 2007 file photo, pedestrians pass a branch office of Bank of America in New York.    (AP Photo)
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(Newser) – The markets ended with modest gains today, led by a rally in financials despite continued anxiety over the future of Freddie Mac and Fannie Mae, MarketWatch reports. Treasury chief Henry Paulson and Ben Bernanke's call for greater regulatory powers encouraged investors. The Dow gained 81.58 points to 11,229.02, the Nasdaq rose 22.96 to 2,257.85, and the S&P 500 gained 8.70 to 1,253.39.

Bank of America led the financials rally after announcing it would not cut its dividend. Dow Chemical rallied after it said it would buy Rohm & Haas for $15 billion. Fannie Mae and Freddie Mac fell 22% and 15%, respectively, continuing a weeklong tumble over fears of a Bear-style implosion despite government reports that the firms are adequately capitalized. (Read more Dow Jones stories.)