Separately, Merrill sold its commercial finance business to General Electric with assets of more than $10 billion.

GE Capital has agreed to purchase most of Chicago-based Merrill Lynch Capital, Merrill Lynch and Co., Inc.’s wholly owned middle-market commercial finance business according to a statement on Merrill web site.

Financial terms were not disclosed.

The acquisition, expected to close in the first quarter of 2008, will add more than $10 billion in assets and $5 billion in commitments to GE Capital Commercial Finance’s base of $260 billion.

Temasek, sovereign fund controlled by Singapore agreed to invest $5 billion according to sources in Singapore. Davis Selected Advisors P agreed to buy stocks worth $1.2 billion in Merrill Lynch according to news report on Bloomberg. Calls to Davis Funds were not returned seeking information on the purchase.

Temasek Holdings will invest $4.4 billion in Merrill Lynch common stock and has the option to purchase an additional $600 million of Merrill Lynch common stock by March 28, 2008. Its ownership position will at all times represent less than 10 percent of Merrill Lynch''s outstanding common stock.

Davis Selected Advisors will be making a long-term investment of $1.2 billion in common equity. Both Temasek Holdings and Davis Selected Advisors will be passive investors and will not have any rights of control and have no role in the governance of Merrill Lynch.

According to the term sheet released on Merrill Lynch web site, Temasek has agreed to a lock up period of one year for the investment. Temasek has agreed to pay $48 per share for a total of $4.4 billion.

Wachovia revised its earnings target for the fourth quarter and for the full year for Merrill Lynch. Wachovia now estimates that the broker will lose $3.87 per share and for the year will earn $6.03 per share lower from the previous forecast of $8.05. The broker also hinted that the earnings may be revised in the next two quarters if the current weakness in the credit markets persists.

Target (TGT: chart) increases by $1.16 to $51.84 after an activist investor William Ackman increases his fund stake in the company to 10% from 9.6% according to a filing with SEC.

Asian markets closed sharply higher led by a surge in India, Shanghai, and Hong Kong.

European markets at mid-day traded higher led by advance in Norway and UK.


[R]7:30AM New York – Asian Markets closed higher led by a surge in India, Hong Kong, and Shanghai.[/R]

Asian markets closed higher ahead of the holiday week.

The talks of continued weakness in the U.S. economy and probable weakness in the interest rate lifted property stocks in Hong Kong. Mining stocks closed higher in Australia. India closed higher as investors supported the rising market on the higher close in the U.S. on Friday.

Markets in Japan, Thailand, and Indonesia were closed.

In Hong Kong Hang Seng index closed up 501.88 or 1.82% to 28,128.80 and in Australia ASX 200 increased by 78.60 or 1.25% to close 6,388.00.

In South Korea Kospi Index increased 41.15 or 2.35% to close at 1,919.47. In India Sensex Index surged 691.55 or 3.61% to close 19,854.12.

Brokerage stocks lifted Chinese stocks. Shanghai Composite Index jumped 2.6% to 5,234.26. Citic Securities rose 5.3% and Northeast Securities soared 7.3%.