Futures Skyrocket As Wall Street Cheers Government Takeover Of Fannie and Freddie

(RTTNews) - US stock futures skyrocketed Monday morning in New York after the government took control of mortgage behemoths Freddie Mac (FRE) and Fannie Mae (FNM) in order to shore up the beleaguered housing market and protect the financial system.

As of 6:15 am ET, the S&P Futures were up 34 points, the Nasdaq Futures were up 38 points, and the Dow Futures were up 242 points.

Stocks ended Friday’s session mixed after seeing significant selling pressure earlier in the week. On Friday, the Labor Department released its highly anticipated monthly report on the employment situation, showing that employment continued to decrease in the month of August.

The outlook for Monday’s session is considerable brighter as Washington’s takeover of Fannie and Freddie has renewed hopes of a turnaround for the housing market. The move to rescue Fannie and Freddie has been endorsed by Fed Chair Ben Bernanke and is seen as proof that the US government will back its federal agencies.

The chief executives at the two firms will be replaced as part of the plan. The Federal Housing Finance Agency will assume the power of management at the companies.

The plan also calls on the Treasury Department to purchase $5 billion of mortgage-backed securities within the next month.

Sunday, global investment bank Lehman Brothers (LEH: News ) said it named Eric Felder and Hyung Soon Lee as global co-heads of fixed income effective immediately. Meanwhile, CNBC reported that Lehman is planning to raise capital and sell off bad debt sometime this week.

The price of oil was up a bit Monday morning in electronic dealing, rising to $0.80 to $107.70 a barrel.

Asian stocks surged higher Monday, with the Hang Seng of Hong Kong rising 861 points and Tokyo’s Nikkei picking up 412 points.

In European intraday dealing, the FTSE of the UK was up 200 points, the DAX of Germany was up 194 points, and the CAC of France was up 190 points.

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Futures Skyrocket As Wall Street Cheers Government Takeover Of Fannie and Freddie