Merrill soars, other banks plunge

Merrill stock surges by nearly one-third on Bank of America merger, but most finance firms plunge.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Aaron Smith, CNNMoney.com staff writer

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%. To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
Some Converse copycats cost big bucks A few bargain brands got swept up in Chuck Taylor's net, but others cost a pretty penny. More
Urban infrastructure gets a second life Railroad beds become parks, power plants become aquariums and slaughterhouses are now art centers as an industrial past turns people-centric. More
Boomtown moms From working mothers raising their kids in RVs to stay-at-home moms who spend their days organizing events for the Oil Wives club, meet the moms of North Dakota's oil boom. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.