- Pre-Market Indications

Monday, June 23, 2008

Opening View: Analysts Expect 3.5-Billion Dollars in Write-Down for Merrill Lynch

Citigroup (C: View sentiment for Csentiment, chart, options) this morning revealed plans to cut as much as 10% of its 65,000 employees in its investment-banking division. The first round of pink slips is expected to circulate as early as today, The Wall Street Journal reported. Meanwhile, The Financial Times reported that Goldman Sachs' (GS: View sentiment for GSsentiment, chart, options) investment-banking division may also cut up to 10% of its workforce.

Elsewhere in the financial sector, Banc of America Securities predicted that Merrill Lynch (MER: View sentiment for MERsentiment, chart, options) will write down $3.5 billion in the second quarter. The brokerage slashed its quarterly earnings estimate to a loss of $1 per share, compared to previous guidance for a profit of 21 cents per share. Analysts remain concerned about MER's exposure to mortgage-related issues and collateralized debt obligations.

In merger-and-acquisition news, Corn Products (CPO: View sentiment for CPOsentiment, chart, options) agreed to be bought by Bunge (BG: View sentiment for BGsentiment, chart, options) . Under the terms of the deal, BG will pay $56 per share for CPO – a value of $4.8 billion. Meanwhile, Republic Services Inc. (RSG: View sentiment for RSGsentiment, chart, options) will acquire Allied Waste Industries (AW: View sentiment for AWsentiment, chart, options) for 0.45 worth a Republic share for each AW share held, valued at $14.04 per share.

The Lundberg Survey reported that the average price of gas has risen 10 cents a gallon over the past 2 weeks. The average national price for a gallon of unleaded regular was $4.10 on Friday – 36.6% higher than a year prior.

Opening View: Analysts Expect 3.5-Billion Dollars in Write-Down for Merrill Lynch

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