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NEW YORK - US stocks opened sharply lower on Friday as investor concern spiked over the financial health of Freddie Mac and Fannie Mae, two US firms which provide key financing to the vast mortgage market.
The blue-chip Dow Jones Industrial Average tumbled 171.71 points (1.53 per cent) to 11,057.31 in initial trades.
The technology-dominated Nasdaq composite index lost 37.67 points (1.67 per cent) to 2,220.18 and the Standard & Poor's 500 index shed 18.55 points (1.48 per cent) to 1,234.84.
Freddie Mac and Fannie Mae's stock had dived in pre-market electronic trading, following vast declines earlier this week, as fears mounted about the future of the groups which buy and sell large portfolios of mortgage securities.
Stocks dropped as a media report said the government could put the finance giants in receivership, which would make their shares worthless.
General Electric meanwhile reported a drop in its second-quarter profit of six per cent to US$5.1 billion dollars as the massive US conglomerate largely weathered an economic storm.
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