PRESS DIGEST - New York Times business news - Sept 15

Sept 15 (Reuters) - The following were the top stories in the New York Times business pages on Monday. Reuters has not verified these stories and does not vouch for their accuracy.

* In one of the most dramatic days in Wall Street's history, Merrill Lynch & Co MER.N agreed to sell itself on Sunday to Bank of America Corp (BAC.N) for roughly $50 billion to avert a deepening financial crisis, while another prominent securities firm, Lehman Brothers Holdings Inc LEH.N, said it would seek bankruptcy protection and hurtled toward liquidation after it failed to find a buyer.

* The big insurance company, the American International Group Inc (AIG.N), was seeking a $40 billion bridge loan Sunday night from the Federal Reserve, as it faces a potential downgrade from credit ratings agencies that could spell its doom, a person briefed on the matter said.

* The Federal Reserve said it would let Wall Street firms post as collateral much riskier assets in exchange for emergency loans through the Primary Dealer Credit Facility.

* Wall Street and the federal government played a game of chicken over the weekend, and neither side backed down, pushing Lehman Brothers Holdings Inc LEH.N toward bankruptcy and setting off worries of a worldwide sell-off when markets open on Monday.

* Merrill Lynch & Co MER.N, which has lost more than $45 billion on its mortgage investments, agreed to sell itself to Bank of America Corp (BAC.N) for $50.3 billion in stock, according to people briefed on the negotiations.

* At emergency meetings over the weekend, the heads of major financial institutions urged Timothy Geithner, the president of the New York Fed, and Treasury Secretary Henry Paulson, to consider having the Securities and Exchange Commission reinstate a temporary rule to limit the risky but potentially lucrative practice of betting on a firm's falling share price, according to two people who were briefed on, but did not attend, the meetings.

* A combined blow from Hurricanes Gustav and Ike has shut down almost all oil and natural gas production in the Gulf of Mexico and handicapped refinery operations in Texas and Louisiana.

* The plunge in UAL Corp (UAUA.O) stock was started by a series of human and machine errors and raised questions about the struggles of some traditional media companies to adapt to the Internet age.

* Electronic Arts Inc (ERTS.O) said Sunday that it had withdrawn its $2 billion hostile takeover bid for Take Two Interactive Software Inc (TTWO.O), ending an eight-month struggle involving two of the biggest names in the video game business.

* The Italian government seemed to make progress Sunday in brokering a deal that would keep Alitalia flying after concerns over the weekend that the airline might have to ground flights because it could not get jet fuel.