A day that opened dismally for financial stocks ended with a flurry of merger buzz as all of Wall Street struggled to assess the implications of Tuesday night's government bailout of American International Group Inc.

Wachovia Corp. and Washington Mutual Inc. both returned to the M&A spotlight late Wednesday, the former amid reports that it had raised the possibility of a merger with Morgan Stanley — itself one of the hardest hit financials. The New York Times reported on its Web site that John Mack, Morgan Stanley's chief executive, had received a call from Wachovia expressing interest in a merger with the Wall Street bank.

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