Ouch

Bad news for Merrill Lynch.

NEW YORK (AP) -- Merrill Lynch & Co., the world's biggest brokerage, on Wednesday said the summer's credit crisis triggered a bigger-than-expected $7.9 billion writedown during the third quarter.

Bad bets on mortgage securities and leveraged loans used for corporate takeovers caused the brokerage's first loss in six years. Merrill Lynch's quarterly performance was the worst by far of the Wall Street firms, all of which were slammed by the market turmoil.

Merrill reported a loss after paying preferred dividends of $2.31 billion, or $2.82 per share, compared to a profit of $3 billion, or $3.50 per share, a year earlier. Revenue, after factoring in some of its losses, fell 94 percent to $577 million from $9.83 billion a year earlier.