Mid-Day Report

The markets retreated from early morning highs to trade mixed during the midday as investors monitor the effects of the government seizure of troubled mortgage giants Fannie Mae and Freddie Mac.  The Dow leaped 144 points to 11,365 while Nasdaq dropped 13 points to 2243.

On the upside

Credit Suisse upgraded real estate investment trusts Anworth Mortgage Asset (NYSE: ANH) and Annaly Capital Management (NYSE: NLY) citing the government's takeover of Fannie Mae and Freddie Mac.

Friedman Billings Ramsey analyst Paul Miller Jr. upgraded PHH Corp. (NYSE: PHH) saying that the government bailout of Fannie Mae and Freddie Mac will increase mortgage market liquidity that could lead to lower mortgage rates.

Shares of homebuilders Lennar (NYSE: LEN) and DR Horton (NYSE: DHI) rose on news that the government seized control of Fannie Mae and Freddie Mac.

On the downside

Fingerprint sensor maker AuthenTec (Nasdaq: AUTH) cut third quarter earnings and revenue outlook citing high inventory levels.

Citigroup downgraded RF Micro Devices (Nasdaq: RFMD) after the company's largest client warned that it would lose market share in the third quarter.

The Office for Thrift Supervision lowered BankUnited Financial's (Nasdaq: BKUNA) capitalization rating from well-capitalized to adequately capitalized.

In the broad market, advancing issues outpaced decliners by a margin of nearly 5 to 3 on the NYSE and by more than 9 to 7 on Nasdaq.  The Russell 2000 which tracks small cap stocks climbed 8 points to 727.