On Friday, the US markets were seeing a sell off on news that Fannie Mae and Freddie Mac (both housing finance giants) were on the verge of bankruptcy. The Dow was down 225 points, below 11000. Suddenly, a rally started which took the Dow into positive territory. The rally did not last as the Dow fell again to close 125 points lower. But, what happened ?
The Blog, Bigpicture says: Go figure: In the midst of a deep selloff, a bullish rumor seems to have been planted that would allow for the rescue of Fannie Mae (FNM) and Freddie Mac FRE).
The rumor was wrong as the Fed denied any such move, but the market had been manipulated.