Merrill soars, other banks plunge
Merrill stock surges by nearly one-third on Bank of America merger, but most finance firms plunge.
NEW YORK (CNNMoney.com) -- Merrill Lynch stock surged by nearly one-third on news that the firm was selling itself to Bank of America, but shares for other banking firms plunged as the sector continued its downward spiral.
Merrill Lynch (MER, Fortune 500) stock rose 26% to $21.52 on the news that Bank of America (BAC, Fortune 500) would buy the beleaguered finance firm for $50 billion in stock, or $29 a share. On Friday, Merrill stock closed at $17.05 a share.
Merrill could use some good news, since its real estate investments caused the bank to lose $17 billion in net losses over the last four quarters.
Meanwhile, shares of Bank of America fell 15% to $28.38.
Another beat-up bank, Lehman Brothers (LEH, Fortune 500), failed to find a buyer and announced that it was filing for Chapter 11 bankruptcy. Lehman shares plummeted 92%, to 28 cents a share.
In separate news, AIG (AIG, Fortune 500) said it was about to announce a restructuring plan, prompting a 39% plunge in the insurance giant's stock.
As the financial services industry was roiled by turmoil, 10 banks said they were forming a $70 billion fund to lend money to troubled banks.
But many of these banks suffered pre-market declines as well, including Goldman Sachs (GS, Fortune 500), down 4%, Citigroup (C, Fortune 500), down 5%, Barclays (BCS), down 10%, and Morgan Stanley (MS, Fortune 500), down 7%. 
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