NEW YORK, Sept. 8 (Xinhua) -- Wall Street pared early gains Monday boosted by the announcement Sunday that the U.S. government plans to bail out mortgage lenders Fannie Mae and Freddie Mac.
The U.S. Treasury Department plans to inject up to 100 billion U.S. dollars in each of the government-chartered mortgage giants, which own or back about half the nation's mortgage debt. The plan alleviated investors' worries that Fannie Mae and Freddie Mac would collapse due to bad mortgage debt.
Investors hoped that the plan could help banks feel more open to write new mortgages and further boost the U.S. economy. Financials are among best performers after the Fannie and Freddie takeover. Citigroup and Bank of America led the sector up more than 3 percent.
Meanwhile, homebuilders gained on speculations that the plan would help the ailing house market.
However, Fannie Mae and Freddie Mac tumbled after Citigroup and Lehman Brothers Holdings lowered their recommendations on the shares.
The Dow Jones rose 160.24 to 11,381.20. Broader indexes traded mixed. The Standard & Poor's 500 index rose 11.65 to 1,253.96 and the Nasdaq fell 3.36 to 2,252.52.
