Shares of Fannie Mae and Freddie Mac, already down on worries about rising rates, lost more ground last week after the Treasury Department announced it would reduce its issuance and buy back debt.

The possibility that the move would result in wider spreads between the yields on Treasuries and the yields on the agencies' debt was seen as another negative for the two companies. On Wednesday, the day of the announcement, Fannie's stock fell $2.50, to $65.25, and Freddie's fell $3, to $53.625.

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