The Dow Jones industrial average surged 1.7 percent but Fannie Mae's and Freddie Mac's stocks got hammered, losing more than 80 percent of their value and trading below $1 a share.
The take-over came as worries heightened over shrinking capital at the congressionally chartered companies, which had combined losses of nearly $14 billion the last four quarters.
Large holders of their debt, including overseas central banks, had shown increasing nervousness. The take-over came as welcome news to China and Japan, the biggest buyers of the two companies' bonds, who praised Washington for its rescue for the mortgage giants.
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