The Federal National Mortgage Corp. reported a gain of 17% in earnings per share, to 63 cents, for the third quarter. The number was about in line with Wall Street's expectations.

Nevertheless, securities analysts were pleased by the report. Thomas O'Donnell of Smith Barney & Co., New York, raised his 12-month earnings target for Fannie Mae shares to $38, from $34. Early Friday, the stock was trading at $36.375, up 50 cents.

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