RPT-Wall St Week Ahead: Battered stocks face another tough week

(Repeating item that initially moved on Friday; Adds Fannie Mae, Freddie Mac developments)

By Steven C. Johnson

NEW YORK, Sept 7 (Reuters) - The bears have been in firm control on Wall Street so far in September, and with anxiety about the health of the United States and world economies on the rise, they probably will not choose this week to go into hibernation.

Federal Reserve Chairman Ben Bernanke said on Sunday he strongly endorses the decision to place beleaguered mortgage finance companies Fannie Mae (FNM.N: Quote, Profile, Research) and Freddie Mac (FRE.N: Quote, Profile, Research) into conservatorship.

"These necessary steps will help to strengthen the U.S. housing market and promote stability in our financial markets," Bernanke said in a statement.

Federal Housing Finance Agency Director James Lockhart placed Fannie Mae and Freddie Mac into conservatorship to ensure the financial soundness of the two companies.

Federal Bank regulators including the Fed, Federal Deposit Insurance Corporation, Office of the Controller of the Currency and the Office of Thrift Supervision said a limited number of smaller banks have holding that are significant compared to their capital.

In a joint statement the regulatory agencies said "they are prepared to work with these institutions to develop capital-restoration plans pursuant to the capital regulations."

The plan, however, was not expected to pull banking stocks out of the doldrums over the long term.