Markets Sink on Merrill Writedowns

The major indexes were down big today, after Merrill reported massive losses linked to the subprime mortgage markets. The S&P fell 1.7%, the Dow fell 1.2%, and the Nasdaq dropped 1.2%.

Merrill Lynch (MER | Quote | Chart | News | PowerRating) announced a Q4 loss of nearly $10 billion, mostly stemming from bad subprime bets. MER fell more than 7% in morning trading (read more).

Ambac Financial (ABK | Quote | Chart | News | PowerRating) fell 48% after reporting larger losses than were expected. The company is rumored to lose its AAA credit rating (read more).

Perini (PCR | Quote | Chart | News | PowerRating) dropped 18% after announcing that the Cosmopolitan Resort and Casino recieved a default note from investor Deutsche Bank. PCR is the general contractor of the casino under construction.

Monsanto (MON | Quote | Chart | News | PowerRating) fell 12% after negative analyst comments

Gold rallied 0.3% after a down day yesterday, while oil continued to fall, down about 0.5%.

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