Washington under the Bush administration has finally decided to bail out the troubled Fannie Mae and Freddie Mac companies in a move that was lauded by investors world wide. Fannie Mae and Freddie Mac, despite their cute names, are the biggest home financing providers in the US and have been the backbone of the housing industry in the US.

Find out how this bailout has affected the Dow Jones below.

Not even Fannie Mae and Freddie Mac were spared in the recent sub-prime crisis as markets worldwide tumbled and jobs were laid off. Thanks to the recent bailout by the US government, the Dow jumped almost 300 points, many other stocks recovered from their previously volatile state and investors world wide heave a sign of relief as some calm starts to settle over the jittery world wide markets.

The Dow industrials jumped nearly 300 points. Bank of America and Citigroup both rose more than 6% and were among the biggest drivers of gains on the Dow and the S&P. Home builders also advanced, with the Dow Jones home construction index rising more than 10%.

On the local front, our own KLSE has started to show signs of recovery and we hope this will continue to last despite our own political issues and the looming deadline of 16 September. Nevertheless, for those who are interested in picking up blue chip stocks, it is still a good time to continue monitoring the market to diversify your investments.