Monday's initial upswing evaporated, declining into a red finish weighed down by investors' credit concern in the financial sector. One company weighed down by the credit crunch, Merrill Lynch & Co., was in talks to raise more money on some potential high-profile divestments. Meanwhile, Maguire Properties Inc. may have finally found a buyer to help it survive its real estate downturn, and Microsoft Corp.-Yahoo! Inc. are talking once again. Behind the backdrop of these developments, the Dow closed down 56.58, or 0.50%, to 11,231.96 while the Nasdaq declined 2.06, or 0.09%, to 2,243.32.
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Merrill Lynch [MER] reportedly is in talks to sell its 20% stake in financial publisher Bloomberg LP and some or all of its 49% stake in asset manager BlackRock Inc. Many experts say talks of the divestments 10 days before Merrill's second-quarter earnings may be an indication that the New York investment bank is headed to another losing quarter. Should Merrill sell its holdings in Bloomberg and BlackRock, it could reap as much as $15 billion to fill its coffers, but the question remains is that amount enough to cover any future losses from its investments in seemingly unpredictable collaterizalied debt?
Meanwhile, Los Anglese-based Maguire Properties [MPG] received a $939.7 million offer from an unnamed bidder. The office landlord put itself up for sale in March while its founder and former CEO Robert Maguire made a bid that he eventually withdrew. Maguire's struggles are reflected in its moribound stock price, which has fallen nearly 65% in 12 months. The company crippled itself with a huge debt of nearly $5 billion to bulk up and become the largest office landlord in Los Angeles at the tale end of the real estate boom.
Lastly, the on-again, off-again merger between Microsoft [MSFT] and Yahoo! [YHOO] may be on again. Microsoft is interested in buying the Internet company's search assets, or Yahoo! as a whole, if shareholders elect a new board of directors. - Gerald Magpily
