UPDATE 1-RESEARCH ALERT-JP Morgan sees Q2 loss at Merrill Lynch

(Adds details)

July 3 (Reuters) - J.P. Morgan Securities said it expects Merrill Lynch & Co Inc MER.N to post a loss in the second quarter on additional write-downs, and that Merrill was more likely to sell its stake in Bloomberg than in BlackRock Inc (BLK.N) if it needed to raise capital.

JP Morgan, which kept its "neutral" rating on the stock, values Merrill's 20 percent stake in financial data company Bloomberg LP at about $3.3 billion.

Merrill, the No. 3 Wall Street investment bank, has a nearly 50 percent stake in money manager BlackRock.

JP Morgan expects Merrill to post a second-quarter loss of $2.00 a share, down from its prior view of breakeven.

For 2008, JP Morgan expects Merrill to report a loss of $2.18 a share, compared with its earlier estimate of a loss of 4 cents a share.

Merrill still has significant exposure to residential and commercial mortgages, totaling about $65 billion, JP Morgan wrote in a note to clients.

Merrill shares closed at $31.15 Wednesday on the New York Stock Exchange. (Reporting by S John Tilak and Esha Dey in Bangalore; Editing by Himani Sarkar)