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Investing

Market Wipes Out Merrill Lynch (MER) Buyout Gains, Tomorrow Looks Worse

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By Douglas A. McIntyre Updated Published
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Merrill_2At one point Merrill Lynch (MER) was up to $22.68 because of Bank of America’s (BAC) buyout offer of $50 billion. Merrill closed at $17.05 on Friday.

Wall St. is now so afraid for the future of even the largest banks and brokerage houses that Merrill closed up only 4% at $17.76. Bank of America, after riding to Merrill’s rescue, closed down more than 21% to $26.55, giving up $24 billion in market cap.

Investors clearly have no confidence in any deal between or among financial companies. After AIG (AIG) received permission from New York State to move $20 billion from its subsidiaries to the parent, the insurance company’s stock moved down 60% to $5.25.

Just as unsettling was the movement in Washington Mutual (WM), the weakened savings and loan giant. It may be the next company in the sector that needs to be "rescued". By some estimates, this could cost the federal government $24 billion. Washington Mutual dropped to $1.99 from a 52-week high of $39.25 and closed near its low.

The DJIA and other major indexes plunged at the close. The Dow was off more than 500 points. The S&P 500 was off by a larger percentage–4.64%.

None of the news bodes well for tomorrow’s open.

Douglas A. McIntyre

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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