Fannie Mae added 12% to $3.42 and Freddie Mac gained 9.7% to $3.18. Pershing Square Capital Management LP bought stakes of nearly 10% in each of the companies and said it may seek talks with management, shareholders and the government.
The government seized Fannie Mae and Freddie Mac after they were pushed to the brink of bankruptcy by investments in bad loans. The two took $187.5 billion in taxpayer aid before reporting record profit this year as the housing market rebounded.
Investor Bruce Berkowitz, is seeking to restructure the companies. Fairholme Capital Management LLC, the mutual-fund firm he runs, this week proposed buying two businesses that insure mortgage-backed securities from Fannie Mae and Freddie Mac.
General Electric Co. rose 0.9% to $27.23. The company said it will sell as much 20% of its North American consumer lending business in an initial public offering in 2014, as Chief Executive Officer Jeffrey Immelt shrinks reliance on financial profits.
Agilent Technologies Inc. rallied 8.4% to $54.79 for the biggest gain in the S&P 500 and the stock’s highest level in 12 years. The maker of testing equipment for electronics and medical devices reported quarterly earnings and revenues that surpassed expectations.
Iron Mountain Inc. climbed 5.4% to $30.02 and Equinix Inc. gained 4.8% to $170. The two technology companies said the Internal Revenue Service is proceeding with evaluating their eligibility to convert to real estate investment trusts.
Vanda Pharmaceuticals Inc. surged 13% to $14.76 after the company won the backing of U.S. advisers for an experimental drug to regulate the circadian rhythms of blind people to help them sleep. Jefferies analyst Oren Livnat reiterated a buy rating and raised the price target to $20 from $13, citing “minimal approval risk.”
Zulily Inc., which runs a shopping website targeted at moms, jumped 72% to $37.94 after raising $253 million in its U.S. initial public offering. The e-commerce company and some stockholders sold 11.5 million shares for $22 apiece.
Western Union sank 5.3% to $16.52, headed for the lowest close since June. The money services company said Chief Financial Officer Scott Scheirman will step down on Dec. 31. Raj Agrawal will serve as interim CFO upon Scheirman’s departure.
Kellogg Co., the maker of Rice Krispies cereal, declined 1.2% to $62.56. The stock was cut to underweight, or sell, from equalweight, or hold, at Barclays Plc.