Mid-Day Report

Despite falling crude oil prices, the markets traded lower during the midday over fears that Fannie Mae and Freddie Mac will require a government bailout.  The Dow lost 13 points to 11,335 while Nasdaq dropped 9 points to 2376.

On the upside

VeriFone (NYSE: PAY) forecast third and fourth quarter earnings ahead of expectations and named Clinton Knowles as interim chief financial officer.

FirstFed Financial (NYSE: FED) lowered its exposure to adjustable rate loans and mortgage backed securities.

Ash Grove Cement purchased 2.2 million shares of Eagle Materials (NYSE: EXP) to acquire a 5% stake in the gypsum wallboard and cement company.

On the downside

Novatel (Nasdaq: NVTL) warned that second quarter results will fall short of estimates and forecast disappointing third quarter results prompting downgrades.

Goldman Sachs analyst Matthew Fassler downgraded OfficeMax (NYSE: OMX) after the office supplies retailer announced the abrupt resignation of chief finacial officer Don Civgin.

Shares of mortgage insurers Radian Group (NYSE: RDN) and PMI Group (NYSE: PMI) tumbled over investor fears that both Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) will require a government bailout.

In the broad market, declining issues outpaced advancers by a margin of nearly 10 to 9 on both the NYSE and on Nasdaq.  The Russell 2000 which tracks small cap stocks added a fraction to 730.