Freddie Designated 'Bear of the Day'

Freddie Mac has been designated the "Bear of the Day" for July 21 by Zacks Equity Research, Chicago. The Bear of the Day is a stock expected to underperform the markets over the next three to six months. "As the housing situation continues to worsen, we anticipate higher losses and writeoffs in the coming quarters," Zacks said. The research firm said Freddie will need to raise more capital, "which is becoming increasingly difficult and expensive," and predicted that the government-sponsored enterprise will suspend or cut its dividend. "Recent measures announced by the Treasury affirm our belief that both the GSEs [Freddie Mac and Fannie Mae] are too big and important to fail, but any investment by the Treasury will further dilute the existing shareholders," Zacks said, adding that it is maintaining its Sell recommendation on Freddie's shares and reducing its six-month target price to $4.50 per share. Zacks can be found online at http://www.zacks.com, and Freddie Mac can be found at http://www.freddiemac.com.