The world’s biggest brokerage announced a wider-than-expected US$4.89 billion second-quarter loss and said it was selling assets — its stake in media company Bloomberg LP for US$4.4 billion and its Financial Data Services Inc. subsidiary for US$3.5 billion. Merrill’s Q2 loss came to US$4.97 per share, after accounting for the payment of dividends for the three months ended June 30. That compares to a year-ago profit of US$2.01 billion, or US$2.24 per share. The broker reported negative revenue of US$2.11 billion versus revenue of US$9.46 billion a year earlier. Analysts had expected that the brokerage would lose US$1.91 per share, according to Thomson Financial.

Merrill, which had already taken US$29 billion of write-downs, racked up a sizable amount in the latest quarter. The brokerage took US$9.4 billion of charges and write-downs from mortgage-backed securities, unprofitable hedge positions, and residential mortgage exposure.

The company reported US$3.5 billion of losses from its exposure to collateralized debt obligations, which are financial instruments tied to mortgages. In addition, it lost US$2.9 billion from wrong-way hedges it bought from bond insurers.

It also took another US$1.7 billion in losses from its investment portfolio of its U.S. banks, and US$1.3 billion in write-downs from exposure to residential mortgages.

After Wells Fargo & Co. and JPMorgan Chase & Co. announced stronger-than-expected earnings this week, Merrill’s results served as a reminder that the credit crisis isn’t fading. Global banks and brokerages have been forced to take some US$300 billion of write-downs in the past year, an amount that some believe could grow to US$1 trillion before the turmoil has passed.

“This was a difficult and disappointing quarter in terms of the bottom line,” Chief Executive John Thain told analysts on a conference call. “But, in spite of this loss, we likely have in our last two quarters more than replaced the capital that we lost.”

Though the firm’s core business held up better than expected, revenue from banking, trading and wealth management fell 21 percent from a year earlier. The company also said it cut its risk exposure across all of its businesses, and that its capital base now stands at US$92 billion.

Merrill’s report was clearly disappointing to investors. The stock, which closed up 9.8 percent at US$20.73 in regular trading amid a general stock market rally, plunged in after-hours trading after the results were announced.

The debt-rating agency Moody’s downgraded Merrill Lynch’s debt within minutes after the results were released. Standard & Poor’s affirmed the broker’s ratings, though it had downgraded them just a few weeks ago.

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