Merrill Lynch & Co <MER.N> may still be forced to sell its valuable stake in fund manager BlackRock to bolster its balance sheet, research firm CreditSights said in a report.

NEW YORK (Reuters) - Merrill Lynch & Co <MER.N> may still be forced to sell its valuable stake in fund manager BlackRock to bolster its balance sheet, research firm CreditSights said in a report.

Merrill Lynch & Co. shares slipped in morning trading Friday after issuing its latest assessment of the damage it has suffered from the credit crisis: its fourth straight quarterly loss and write-downs from failed investments approaching $40 billion.

Merrill Lynch & Co. on Thursday issued its latest assessment of the damage it has suffered from the credit crisis: its fourth straight quarterly loss and write-downs from failed investments approaching $40 billion.

Merrill Lynch & Co <MER.N> posted a much larger-than-expected $4.89 billion quarterly loss on Thursday after writing down soured debt, and unveiled plans to sell billions of dollars of assets -- including a part of its lucrative brokerage business -- to shore up capital.

By Elinor Comlay

Moody's Investors Service downgraded the senior long-term debt of Merrill Lynch & Co. to "A2" from "A1" Thursday to after the world's largest brokerage posted a $4.9 billion second-quarter loss, hurt by massive write-downs from mortgage-backed securities and other risky investments.

Among the earnings stories for Thursday, July 17, from AP Financial News:

Merrill Lynch came close to selling its 49 percent stake in BlackRock, but pulled the plug at the last minute because of concerns from rating agencies.

Stocks resumed their ascent after a midmorning dip as oil began to recede and financials rallied.

"It's a sucker's rally," Kathy Boyle, president of Chapin Hill Advisors, says of this week's market move. "If you make money here, don't get greedy."

Stocks resumed their ascent after a midmorning dip as oil began to recede and financials rallied.

The financial-driven rally lost steam, leaving stocks mixed, as oil rebounded and the Philadelphia Federal Reserve reported weaker-than-expected manufacturing activity in its region.

U.S. money manager BlackRock posted a better-than-expected 23 percent rise in second-quarter profit as assets under management rose.