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Merrill Lynch Posts $4.65 Billion Loss In Second Quarter
Merrill Lynch has been hit with $19 billion in losses over the past year.
(By Seth Wenig -- Associated Press)
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Merrill posted a second-quarter loss of $4.65 billion ($4.95 a share), excluding businesses it had shut down, compared with a profit of $2.14 billion ($2.10) in the corresponding period a year earlier, the company said in a statement. Analysts' estimates ranged from losses of 93 cents to $4.21 a share, according to surveys taken Bloomberg and Thomson Reuters.
The company reported earnings after a second strong day for U.S. stocks, which shot up as oil prices continued to tumble. Oil prices fell $5.31 to settle at $129.29 a barrel yesterday, dropping more than $10 in the previous two days.
Investors who bought crude oil as a hedge against losses on Wall Street have come to see stocks as a good investment again, said Phil Flynn, an oil analyst at Alaron Trading in Chicago.
The Dow Jones industrial average climbed 207.38 points, or 1.85 percent, to close at 11,446.66. The broader Standard & Poor's 500-stock index gained 14.96, or 1.20 percent, to 1260.32. The technology-oriented Nasdaq composite index gained 27.45, or 1.20 percent, to 2312.30.
Fannie Mae and Freddie Mac continued their rebound yesterday, closing up 18 and 22 percent, respectively.
J.P. Morgan reported that second-quarter earnings fell 53 percent, to $2 billion (54 cents). Analysts had expected earnings per share to fall to 44 cents, according to a Bloomberg survey. J.P. Morgan's shares gained 14 percent yesterday.
Investors shrugged off continued weakness in the housing market yesterday. Home construction, including apartment buildings, grew 9.1 percent in June to a seasonally adjusted 1.066 million annual rate because of a change in New York building codes but otherwise continued to stumble. Excluding data from the Northeastern part of the country, housing starts fell 4 percent from May. Home construction was down 26.9 percent last month compared with June 2007.
The housing market remains weak and is not expected to turn around for some time, said Bernard Markstein, a senior economist and director of forecasting for the National Association of Home Builders. "Housing starts are going to slip further in the next few months," he said.
Staff writer Simone Baribeau contributed to this report.
