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U.S. stocks rallied on Wednesday on upbeat earnings results from Intel Corp. and financial giant J.P. Morgan Chase gave new hopes that companies are still making money while the U.S. economy takes a downturn.

Merrill Lynch, Inc, is expected to report a loss for the first quarter of the year on Thursday, and is also expected to write down several billion dollars' worth of securities linked to the falling housing market, along with markdowns related to mono-line bond insurer and leveraged buyouts.

J.P. Morgan Chase & Co. is expected to report that its first quarter profit fell by more than 50 percent on Wednesday due to potential additional write-downs, and other expenses related to the tough mortgage market.

U.S. stocks fell on Monday for a second day after Wachovia Corp. reported an unexpected first quarter loss, adding to investors tension about earning reports after bellwether General Electric Corp. disappointed last week with its earnings loss.

Merril Lynch will likely write down between $6 billion and $6.5 billion linked to several types of debt, senior company executives said, according to a report.

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U.S. stocks extended losses Thursday, pushing the Dow Jones and the S&P 500 down more than 1 percent, after Federal Reserve Chairman Ben S. Bernanke said some smaller banks are likely to fail and jobless claims rose.

MBIA Inc, the world's largest bond insurer, said it will stop guaranteeing asset-backed securities for six months and plans to split that business from its municipal bond unit, moves aimed at restoring stability in troubled credit markets.

Goldman Sachs said it expects additional writedowns of about $1 billion to $12 billion each for several major U.S. brokers in the first quarter, with Citigroup estimated to record the highest amount of about $12 billion.

Investors who have written off 2008 as a year of an economic slowdown and depressing stock market returns, are already gearing up to face a cocktail of new problems next year.

Credit Suisse has written $2.85 billion off the value of its asset-backed investments and found mismarking and pricing errors on its books, it revealed on Tuesday, sending its shares plummeting. The bank said the write-downs would wipe $1 billion from its first-quarter net income, after taking into account tax credits and cancelling some staff bonuses, but it still expected to stay in profit in the quarter, despite the charge.

Wall Street investment banks, stung by debt losses, have cut tens of thousands of jobs, but even more significant cuts are coming in the months ahead amid a bleaker earnings outlook.

China's securities regulator has approved the creation of at least three new mutual funds to raise more than 20 billion yuan ($2.8 billion), in an apparent effort to support the sagging stock market, sources said on Friday.

U.S. stocks finished lower on Monday following last week's big rally, as investors trimmed positions caused by troubled financial sectors which suffered from several broker downgrades.

Massachusetts filed a civil complaint on Friday against brokerage Merrill Lynch and two brokers once employed at the firm, accusing the firm of fraud and misrepresentation when it sold complex securities its sold were unsuitable for the city that quickly became illiquid and lost most of their market value.

Mizuho Financial Group's $1.2 billion investment in Merrill Lynch marks a turning point for Japan's once-reeling banks which, after shedding bad debt and rebuilding their businesses, are once again looking for opportunities abroad.

UBS, the biggest European casualty of the U.S. subprime crisis, said it was shrinking its investment banking business, cutting staff and drastically scaling down its exposure to risky investments.

The subprime mortgage crisis is claiming more victims as shares of bond insurers Ambac Financial Group, Inc. and MBIA, Inc. fell sharply on Thursday over concerns that they could lose their AAA credit ratings.

The dollar fell on Thursday after comments by Federal Reserve Chief Ben Bernanke echoed a statement made earlier this week signaling that the Federal Reserve would continue to cut interest rates, reducing the attractiveness of deposits in the currency.

U.S. stocks fell on Thursday after Federal Reserve Chairman Ben Bernanke said that the economic outlook has worsened and Merrill Lynch & Co. reported the a big loss related to the struggling mortgage lending market.

Merrill Lynch exposed billions more in losses related to the troubled mortgage lending market on Thursday, with newly hired chief executive calling the latest quarterly results clearly unacceptable as the company moves to straighten out its balances. Merrill reported an $11.5 billion write-down in its last quarter, while recording an overall loss of $9.3 billion for the same period.

The dollar fell near its all-time low on Monday on speculation poor results from major U.S. banks this week will prompt the Federal Reserve to cut interest rates.

A pair of the largest U.S. banks are expected to report big losses this week, including write-downs worth tens of billions of dollars due in part to the ongoing global credit crisis, triggered by bad bets in mortgage-related investments.

Merrill Lynch is expected to suffer $15 billion in losses stemming from soured mortgage investments, almost twice the company's original estimate, the New York Times reported on Friday.

Citigroup, Inc. and Merrill Lynch & Co., U.S. banks which have seen heavy losses due to bad bets on the mortgage market, are in discussions to get up to $10 billion and $4 billion in capital respectively primarily from foreign governments, according to a report on Wednesday.

Former First Republic Bank shareholders sued Merrill Lynch & Co on Friday accusing the Wall Street investment bank and brokerage of hiding billions of dollars of losses related to subprime mortgages while the companies' merger was pending.

Nations are making deals with top exporters to to get enough oil and develop new projects to boost economic growth.

At Goldman Sachs Group, success has become something of a liability.