Merrill Lynch & Co., the third-biggest American securities firm, reported a wider-than-forecast quarterly loss as the credit contraction saddled the company with $9.7 billion of writedowns.

Moody’s Investors Service cut Merrill’s credit rating and the firm’s shares fell after it posted the second-quarter net loss of $4.65 billion, or $4.97 a share. The results, which compared with earnings of $2.14 billion a year earlier, were worse than the most pessimistic analyst forecast in a survey by Bloomberg.

The chief executive officer of the company, John Thain, cut about 4,200 jobs in the first half of the year and is divesting assets to stem record losses and a 43% drop in Merrill’s share price during 2008. The company said it completed a $4.43 billion sale of its stake in Bloomberg LP and plans to sell a controlling interest in Financial Data Services Inc. Merrill’s charges from the credit crisis now exceed $46 billion.

Also yesterday, JPMorgan Chase & Co., the largest American bank by market value, said profit fell 53%, a smaller drop than analysts estimated, on mortgage-related writedowns and costs from the takeover of Bear Stearns Cos.

JPMorgan rose almost 6% in New York trading after the company said second-quarter net income was $2 billion, or 54 cents a share, compared with estimates for 44 cents in a survey of analysts by Bloomberg. Profit was $4.23 billion, or $1.20 a share, a year earlier, the New York-based bank said in a statement yesterday.