INSTANT VIEW: Merrill to sell shares

NEW YORK (Reuters) - Merrill Lynch & Co MER.N said it expects to take a $5.7 billion pretax write-down in the third quarter due to losses on its sale of mortgage assets and plans to raise at least $8.5 billion by selling common shares.

Merrill, which has already taken billions of dollars of writedowns and sold key holdings including a 20-percent stake in Bloomberg when it announced its second-quarter earnings, said on Monday Singapore's Temasek Holdings would buy $3.4 billion of the offering.

The following are market comments on the firm's announcement:

COMMENTS

WILLIAM LEFKOWITZ, OPTIONS STRATEGIST AT BROKERAGE FIRM

VFINANCE INVESTMENTS IN NEW YORK

"Investors were hopeful that the financial companies that were taking these major write downs were not going to issue common stock to raise capital.

"With the issuance of stock from Merrill Lynch, that could lead to more selloffs in the financial area. The puts in several of the financials were active today including Merrill."

FREDERIC RUFFY, OPTIONS STRATEGIST AT WEB INFORMATION SITE

WHATSTRADING.COM

"Taken together, the news is a reminder that the problems facing Merrill are far from over. It is facing more write downs and needs more capital. The overall affect on third-quarter earnings and beyond is not good.

"In addition, uncertainty still remains. While today's news will clearly enhance Merrill's capital position, the longer-term outlook for future earnings is still difficult to quantify.

"For that reason, shares have been trading lower and we have seen a lot of interest in Merrill puts over the past few trading sessions. Implied volatility is high, which is generally the case during periods of extreme uncertainty and investor anxiety."

KIM RUPERT, MANAGING DIRECTOR OF GLOBAL FIXED INCOME

ANALYSIS, ACTION ECONOMICS, SAN FRANCISCO

"It might be able to soothe some fears. Even the fact that they found some buyers is decent and they're able to raise capital.