* Fannie Mae and Freddie Mac sink before the bell
* Geopolitical concerns add to investor anxiety
* Oil hits a record, hurting sentiment
* GE profit matches forecasts, stock see-saws
(Adds details, updates prices)
By Ellis Mnyandu
NEW YORK, July 11 (Reuters) - U.S. stocks headed for a
sharply lower open on Friday on worry about the widening impact
of the credit crisis and the stability of home financing
providers Freddie Mac <FRE.N> and Fannie Mae <FNM.N>.
A report in the New York Times said the U.S. government is
considering taking over the government-chartered, publicly
traded companies, threatened with capital shortages in the face
of mounting losses from loan delinquencies and foreclosures.
Shares of the two companies, which buy mortgages and
package them into securities, plummeted before the opening
bell. The White House declined comment on any deliberations on
Freddie Mac and Fannie Mae. For details, see [].
"The credit crisis is getting more intense, the runup in
oil is getting more intense, and of course the potential for
military conflict (with Iran) is intensifying," said Marc Pado,
U.S. market strategist at Cantor Fitzgerald & Co in San
Francisco
"There isn't anything out there that's good. Nobody wants
to be a long holder of stocks over the weekend. For the most
part people are at their most defensive levels."
S&P 500 futures <SPc1> slid 14.90 points and were below
fair value, a mathematical formula that evaluates pricing by
taking into account interest rates, dividends and time to
expiration on the contract.
Dow Jones industrial average futures <DJc1> tumbled 115
points, and Nasdaq 100 <NDc1> futures sagged 18.25 points.
In another source of gloom, oil hit a record high price as
nervousness about the Middle East grew, particularly over
Iran's nuclear efforts, and investors fretted about access to
supplies from Nigeria and Brazil.
Freddie Mac plunged 45 percent at $4.40 before the bell.
Fannie Mae tumbled 52 percent to $6.30. Also falling was Lehman
Brothers <LEH.N>, down more than 14.7 percent to $14.74.
A government rescue of both companies would mark the second
time that Washington has had to step in to support the
financial system since mounting defaults in the U.S. subprime
mortgage industry grew into a global credit crisis in August
2007.
In March the Federal Reserve backed a plan for JPMorgan
Chase & Co <JPM.N> to buy beleaguered investment bank Bear
Stearns.
Among earnings reports, General Electric <GE.N>, a Dow
component, posted second-quarter profit as expected by Wall
Street, but its stock gave up an earlier bounce as the company
forecast profit at its finance arms to either be flat or down
in the third quarter.
Data on consumer sentiment is due at 10 a.m. (1400 GMT)
(Editing by Kenneth Barry)
