'Underperform' Rises in Merrill Mix

Starting next month, Merrill Lynch & Co. will require that at least 20% of the stocks followed by the brokerage firm's equity analysts have an "underperform" rating -- a signal to investors to sell those stocks.

Under the new rules, no more than 70% of stocks in a coverage area can be rated a "buy" and no more than 30% can have a "neutral" rating. Merrill Lynch described the mandates as "an absolute-return system with a relative twist," ...