Merrill Lynch hit with earnings downgrades

The embattled financial sector racked by the credit crisis took another hit on Tuesday after JPMorgan Chase and UBS AG lowered their views on Merrill Lynch & Co Inc, expecting the Wall Street firm to disclose more writedowns.

In turn, Merrill sweepingly downgraded regional banks Bank of America, PNC Financial and SunTrust Banks Inc, saying the bursting of the housing bubble will continue to have negative impacts on lending and home equity.