NEW YORK (Reuters) - Bears have reigned supreme on Wall Street so far in September thanks to growing concern about economies worldwide, but their grip on stocks faces a big challenge after the U.S. government's weekend seizure of control of mortgage finance giants Fannie Mae and Freddie Mac.Since late spring stocks have been caught in a vise of investor anxiety about the fate of the two linchpins of the U.S. mortgage market, which between them own or guarantee more than half of the $12 trillion outstanding U.S. home loans.
With home prices continuing to spiral lower, Fannie Mae's (NYSE:FNM - News) and Freddie Mac's (NYSE:FRE - News) losses deepening by the week and sources of fresh private capital increasingly scarce, investors worried that any collapse of the two would trigger a global financial catastrophe.
But analysts said Sunday's move to place them under government control should alleviate worry about the worst-case scenario and removes a veil of uncertainty that markets loathe.
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