Downey, Fannie, Freddie, Washington Mutual: U.S. Equity Movers

By Eric Martin

Sept. 8 (Bloomberg) -- The following companies are having unusual price changes in U.S. markets. Stock symbols are in parentheses after company names, and prices are as of 9:40 a.m. in New York.

Cognizant Technology Solutions Corp. (CTSH US) increased 6.1 percent, the most since April, to $29.45. The provider of on-site computer-technology support may rise to $40 a share as the U.S. and global economies recover, Barron's reported, citing Sanford C. Bernstein & Co. analyst Rod Bourgeois.

Discover Financial Services (DFS US) rose 8.8 percent, the most in a month, to $17.87. The credit-card issuer may earn a premium of as much as 30 percent if it were acquired by a company looking for credit-card issuing and processing capabilities, Barron's reported, citing a July report by Buckingham Research Group.

Downey Financial Corp. (DSL US) lost 6.5 percent, the most in a week, to $2.90. The savings and loan that's reported four straight quarterly losses was ordered by regulators to raise cash by the end of the year and submit a plan to strengthen management.

Fannie Mae (FNM US) plunged 85 percent to $1.06, and Freddie Mac (FRE US) tumbled 79 percent to $1.09. The U.S. government seized control of the largest mortgage-financing companies, eliminating common and preferred dividends and getting warrants representing ownership stakes in the firms.

Financial companies rallied on speculation the takeover will help them recover from the subprime-mortgage crisis. Citigroup Inc. (C US), the biggest U.S. bank, gained 9.2 percent to $20.83. American International Group Inc. (AIG US), the nation's largest insurer, added 7.7 percent to $24.06. Bank of America Corp. (BAC US), the second-biggest U.S. bank, jumped 9.7 percent to $35.35. JPMorgan Chase & Co. (JPM US), the third-largest, rose 8.5 percent to $42.95.

Washington Mutual Inc. (WM US) rose the most in seven weeks, gaining 13 percent to $4.81. The biggest U.S. savings and loan removed Kerry Killinger as chief executive officer after he failed to halt losses tied to home mortgages.

To contact the reporter on this story: Eric Martin in New York at emartin21@bloomberg.net.