Stocks set to falter

Futures point to lower open as investors digest big loss at troubled mortgage finance giant Freddie Mac; oil hovers above $119.

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NEW YORK ( -- Stock futures lost ground Wednesday after battered mortgage finance giant Freddie Mac reported a wider-than-expected quarterly loss.

About three hours before the market open, Nasdaq and S&P futures were mixed, with a comparison to fair value suggesting a sluggish start for stocks.

Stocks snapped a three-session losing streak Tuesday after oil prices slid to a fresh three-month low and the Federal Reserve held rates steady, as expected. The Dow rallied 331 points.

Freddie Mac: But the enthusiasm faded after Freddie Mac reported a loss of $821 million, or $1.63 per share, for the second quarter ended June 30. Revenue fell to $1.69 billion from $2.34 billion.

Analysts surveyed by Thomson Reuters had expected the company to post a loss of 41 cents a share on revenue of $2.19 billion.

Shares of Freddie Mac (FRE, Fortune 500) and Fannie Mae (FNM, Fortune 500), which together back about half of the mortgages in the U.S., have been pummeled as the companies have been hit by the housing downturn.

Their stock prices have rebounded recently, but the weaker-than-expected results from Freddie could spark another sharp selloff in their shares.

Fannie is scheduled to report results Friday.

Oil: Oil prices rose slightly ahead of the government's energy supply report. U.S. crude for September delivery rose 33 cents to $119.50 a barrel in electronic trading.

The Department of Energy is due to release its weekly report on fuel inventories at 10:35 a.m. ET. Traders will be looking at the report's data on gas supplies for further evidence that demand is weakening.

Earnings: Elsewhere on the earnings front, media giant Time Warner (TWX, Fortune 500), which is the parent company of, reported a 26% slide in quarterly profit.

Bond insurer Ambac (ABK) posted a profit of $823.1 million, or $2.80 per share, for the second quarter. Analysts had expected a loss of 65 cents per share.

Results also are due before the market open from private equity giant Blackstone Group (BX).

After the market close Tuesday, News Corp. (NWS, Fortune 500) reported a 27% rise in quarterly earnings.

Tech: Cisco Systems (CSCO, Fortune 500) posted solid results late Tuesday that topped Wall Street's estimates, but the tech bellwether lowered its growth forecast.

Other markets: In Asia, stocks rallied on the back of Wall Street's advance. European markets rose in midday trading. To top of page

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