Aluminum ETF Jumps on New From China

Fannie Mae (FNM) and Freddie Mac (FRE), the two beleaguered mortgage giants, took big hits today as investors fretted over the future of the two companies. A former Federal Reserve official warned the companies may need government help. But in Capitol Hill testimony Treasury Secretary Henry Paulson pushed for possible regulatory reform of the financial system while adding, "For market discipline to effectively constrain risk, financial institutions must be allowed to fail." Those comments certainly didn't lend any clarity to the situation.

Meanwhile, Dow Chemical (DOW) agreed to buy Rohm & Hass (ROH) for $18.8 billion (including debt) and General Electric (GE) is evidently looking to spin off its industrial and consumer group. In a surprising move, aluminum rallied Thursday, taking the shares of Alcoa (AA) with it. Alcoa, which reported decent earnings Tuesday, saw its share price soar over 9% today. Bullish sentiments around oil returned, too, pushing the per-barrel price $5 higher to $141.

There was also a mixed bag of economic news to contend with. Initial jobless claims fell 14% from last week. However, home foreclosures jumped 53%.

All that news had the market swinging all session. The Dow Jones Industrial Average was up 1% before losing that entire gain. In the last hour of trading, though, the benchmark managed to move back into positive territory, closing ahead 82 points to 11,229.

Economic Data
Trade Balance (8:30 a.m.), Import Prices (8:30 a.m.), Federal Budget (2 p.m.)