Merrill Reports $4.9 Billion Loss

Merrill Lynch & Co., weighed down by $9.4 billion in write-downs, posted a second-quarter loss of $4.89 billion Thursday and unveiled plans to sell billions of dollars of assets.

Merrill chief executive John Thain called the quarter – Merrill's fourth straight losing quarter – "disappointing." Merrill Lynch has racked up close to $40 billion in write-downs since the credit crisis began a year ago, with net losses of $19.2 billion.

Thain, though, stressed the firm's drive to increase capital and confirmed that Merrill had completed the sale of its 20 percent stake in Bloomberg LP for $4.43 billion.

"Our core franchise continues to perform well despite the extremely challenging market environment," said Thain in a statement, according to the Associated Press. "Importantly, with the transactions we announced today, we are bolstering our capital base and continue to move forward on our risk management and strategic growth initiatives."

Thain inherited a struggling investment bank in November, the nation's third largest, burdened by massive write-downs that forced the ouster of former chief executive Stanley O'Neal.

But Thain has recently taken heat for his own missteps since taking over, as the Merrill's assets continue to deteriorate.

"They're moving in the right direction but Merrill still has significant challenges, including material exposure to collateralized debt obligations," Chris Armbruster, an analyst at Al Frank Asset Management, told Reuters. "We like the company, but it's going to be a tough go."

In addition to the sale of its stake in Bloomberg, Thain announced Merrill plans to sell a controlling stake in its Financial Data Services Inc. unit for $3.5 billion, according to Reuters.

But the capital Merrill expects to raise, roughly $8billion with the sale of its stake in Bloomberg and Financial Data Services, would only offset the losses Merrill has posted in recent quarters.