Merrill Lynch said yesterday it would offer online trading to all its clients, as the largest US brokerage battles for business with cyber brokers such as Charles Schwab Corp.

The full-service brokerage, which long resisted Internet trading for fear of losing fat commission fees, now will give all its clients the option to trade online as early as July. It already offers a handful of clients online trading.

Merrill's shares fell $6.50 (€6.22) to $77.50 in early morning trading on the New York Stock Exchange, amid fears the securities firm's move might eat into profits near-term.

"Merrill Lynch is going to lose revenue short-term as a result of this Internet strategy," Mr Michael Flanagan, an analyst at Financial Service Analytics, said. "Longer-term I expect revenues to recover and for Merrill to maintain its prominence in the financial services industry."

The growth of Internet trading means traditional Wall Street firms, which once raked in profits through a network of brokers and branches, now vie with upstart online brokers that charge as little as $10 or less a trade. San Francisco-based Schwab, the largest US discount and Internet broker, has become an almost unstoppable rival, processing more than 160,000 trades a day. Merrill and other traditional Wall Street houses such as Morgan Stanley Dean Witter have found themselves unable to stand against the rush of investors looking to trade stocks on the Internet. Online brokers processed a record 630,000 trades a day in April.

Starting in July, Merrill said it would provide a full range of services allowing clients to do business over the Internet. For a minimum annual fee of $1,500 clients could do an unlimited number of trades in most securities online. Another type of account would charge $29.95 per trade for US equities, the firm said.

The move comes as US stock exchanges review plans to expand their trading hours into the night, by as early as this summer, in an effort to compete with a rising number of electronic trading systems.