MADISON, Wis. -- Bond investors reacted to the Fannie Mae and Freddie Mac conservatorship by taking on riskier assets outside of U.S. Treasuries while others turned to financial and consumer stocks in anticipation of lower mortgage rates, according to MEMBERS Capital Advisors.

The Fannie/Freddie rescue plan appeared to calm the "simmering fears of bankruptcy if bad debts were to continue to mount at both institutions," the CUNA Mutual Group registered investment adviser subsidiary wrote in its MarketLine alert this week.

"Financial and consumer stocks led the way as investors hope that lower mortgage rates will improve the consumers' fragile financial position and provide a boost to the overall economy," said Scott Opsal, managing director, portfolio manager for MEMBERS Capital.

Equity markets dislike uncertainty more than anything else, Opsal explained, and "resolving the future of [Fannie and Freddie], while costly to common stock and preferred investors, removed a significant amount of uncertainty from the mortgage market and the financial sector."

"The longer term housing market, financial institution and broad economic implications of the bailout are much more difficult to predict. The bailout is certainly not a 'silver bullet'" said Mark Prusha, another managing director, portfolio manager for MEMBERS Capital. "Bottom line, the bailout is positive for the economy, but recovery is still a ways off."