Merrill Lynch posts big loss, cutting 2,900 jobs

By Dan Wilchins

NEW YORK (Reuters) - Merrill Lynch & Co (MER.N: Quote, Profile, Research, Stock Buzz) posted its third straight quarterly loss on Thursday and said it planned to cut 2,900 more jobs after recording more than $6.5 billion in write-downs on subprime mortgages and other risky assets.

The $2 billion loss was worse than Wall Street analysts' gloomy expectations, but Merrill Lynch's shares rose 4 percent amid hopes the world's largest brokerage was closer to seeing improvement.

"My sense is, they tried to clean the bad stuff off the shelves, and they hope it's mostly in the trash," said Michael Holland, founder of Holland & Co, which oversees more than $4 billion of assets.

Merrill Lynch's first-quarter net loss to common shareholders was $2.14 billion, or $2.19 per share, compared with a profit of $2.11 billion, or $2.26 a share, in the same quarter last year.

The loss from continuing operations was $2.20 per share, wider than the analysts' average forecast of $1.96, according to Reuters Estimates.

Chief Executive John Thain said the bank is well capitalized, but in a conference call with reporters said Merrill Lynch may look to issue preferred shares similar to JPMorgan Chase & Co's (JPM.N: Quote, Profile, Research, Stock Buzz) $6 billion sale on Wednesday.

In January and earlier this month, Thain said Merrill Lynch was not looking to raise more capital.

Thain said on a conference call with investors on Thursday that the three months ended March 31 were "as difficult a quarter as I've seen in my 30 years on Wall Street."