Fannie Mae, Freddie Mac, Marriott International.

They call them Washington's blue chips because, back in the good old days, the blues were the biggest chips on the poker table.

Now, the blues is what stockholders of these local giants are singing after a painful third quarter.

Investors lost money on the stocks of 10 of the 20 largest companies in the region, with Marriott, Freddie and Fannie taking the biggest hits in the three months that ended Friday.

Last Wednesday, Fannie Mae suffered its worst blow since the 1987 stock market crash. Its stock was knocked down almost $5, or 11 percent, by a Dow Jones Newswires report that its accounting problems are even worse than previously reported. Stock in the District-based mortgage giant bounced back more than $3 a share the next day, after old friends on Wall Street came to its rescue.

Not to worry, insisted analysts at J.P. Morgan Securities and Morgan Stanley. Both are major players in the mortgage securities market that do billions of dollars of business a year with Fannie.

"It's not clear that the issues raised in the Dow Jones report would be material," said J.P. Morgan. "Relatively small impact," nodded Morgan Stanley.

Maybe. It's hard to know, given how little has been publicly disclosed about the various inquiries into Fannie, including the accounting investigation being conducted by former senator Warren Rudman. The only new tidbit Rudman offered last week was that his probe might not be finished on schedule in December, but will be done by January.

The friendly analysts could be right. It could turn out that the Wall Street investors who have been dumping Fannie Mae stock and driving down the price simply panicked in the face of uncertainty and made a costly blunder by bailing out.

It will be the middle of next year before Fannie puts out corrected numbers. Based on what happened after a similar accounting investigation at its counterpart, McLean-based Freddie Mac, the stock could rebound once the financial restatement is completed.

But Freddie's rebound was only temporary. Last quarter the stock fell steadily, in tandem with Fannie's. Freddie's stock plunged to $56.46 from $65.23, a 13.4 percent loss. Fannie shares dropped to $44.82 from $58.40, a 23.3 percent loss.

If the percentage losses aren't scary enough, consider how much stockholder money has vaporized. Fannie's stock market value fell about $13 billion last quarter while the total value of Freddie's stock dropped $6 billion.

Fannie's accounting irregularities are not the only issue depressing the stocks of the two government-charted mortgage companies.

Congress is considering legislation to tighten regulation of Fannie and Freddie. The Bush administration is playing hardball, calling for even tougher oversight than some in Congress are supporting.

And as every homeowner in real estate-obsessed Washington knows, the housing market is peaking after the greatest boom in history. Mortgage interest rates are creeping higher, home sales are slowing, most everybody who could refinance already has. The mortgage business isn't going to keep growing the way it has.

At the same time, Fannie and Freddie are losing market share to private lenders.

Fannie, in fact, is deliberately downsizing its business under pressure from regulators. Its mortgage holdings have shrunk for 10 months in a row. Freddie, which has a stronger financial base, continues to grow.

Despite the bites they have taken out of investors, Fannie and Freddie are still rated "buy" by the majority of the analysts who follow them. Many of those "buy" ratings, however, come from firms that do business with both.

Though their operations are basically the same, Fannie and Freddie should be looked at as individual investments, say analysts at Fox-Pitt Kelton, a European investment firm that specializes in financial institutions.

In a report issued last week, the firm noted that Fannie's stock sells for about 1.5 times book value while Freddie shares go for just 1.2 times book. Book value measures a company's net worth, after debts are deducted from assets.

Cautioning that the higher valuation given to Fannie is "unwarranted," Fox-Pitt Kelton predicted the ratios would converge, making Freddie a better investment.

Washington investors have to wonder, though, whether Fannie and Freddie will ever again be what they once were: Washington's two best growth stocks, producing steadily higher earnings and a steadily rising stock price.

Last quarter, Fannie and Freddie also lost their titles as the biggest businesses in town.

With the completion of the merger of Northern Virginia's Nextel Communications Inc. and Sprint Corp., the new Sprint Nextel Corp. is now the region's biggest business based on the total value of its stock. With a market capitalization of about $69 billion, Reston-based Sprint Nextel is twice as big as the shrunken Fannie or Freddie.

Nextel shareholders who rolled their investment over into Sprint stock had a disappointing quarter, as Sprint shares fell 5.2 percent. Investors and analysts generally like the merger, but are waiting to see how well the two companies do in combining their operations and how much money they can save in the process.

Marriott International Inc. was the other local blue chip stock that badly disappointed investors last quarter, falling 7.7 percent to $63 from $68.22.

The world's biggest hotel company was hurt by its second-quarter financial report. While showing the lodging business was growing steadily, the report was cluttered with some one-time accounting adjustments that confused investors.

Record gasoline prices are hurting most travel and lodging industry stocks because investors believe people will travel less. How much a threat that really is not yet clear. The people renting rooms at Marriott's Ritz-Carlton chain aren't likely to be deterred by $3 a gallon gas when they're paying $300 a night for rooms.

Hurricane Katrina took a direct toll on Marriott because the Bethesda company is one of the largest hotel operators in New Orleans, with 15 properties.

The day the hurricane hit, Marriott shares plunged, but they made an even bigger recovery on Friday after the flagship 494-room J.W. Marriott hotel reopened, with chief executive J.W. Marriott Jr. on hand for the ceremonies. Seven New Orleans area Marriott properties are now back in business, mostly housing relief and reconstruction workers.

Fannie Mae, led by chief executive Daniel H. Mudd, is deliberately shrinking its home mortgage business under pressure from regulators.Freddie Mac, led by chief executive Richard F. Syron, lost about $6 billion in share value last quarter.