Updated from 7:23 a.m. EDT

FleetBoston Financial

(FBF)

agreed to buy specialist firm

M.J. Meehan & Co.

in a deal that will significantly boost the Boston-based bank's floor-trading operation on the

New York Stock Exchange

.

Specialist firms trade on the floor of the stock exchange in specific stocks, and use their own capital if needed. Meehan is a specialist for 119 stocks, including

General Motors

(GM) - Get Report

and

Wal-Mart

(WMT) - Get Report

, and would combine with FleetBoston's 314 stocks, which include

Coca-Cola

(KO) - Get Report

and

General Electric

(GE) - Get Report

, to create the largest NYSE floor-trading firm in terms of number of stocks. The combined company would rank second in trading volume with 18%, behind

LaBranche & Co.

.

The new firm, to be called

Fleet Meehan Specialists

, will make a market in 433 common stocks listed on the NYSE, including 59 of the 250 most active stocks, eight of the 30

Dow Jones Industrial Average

companies, and 86 of the

S&P 500

companies.

Terms of the deal were not disclosed although

The Wall Street Journal

, which originally reported the deal Tuesday, estimated it at $200 million.

The deal, subject to regulatory approval from the

Federal Reserve

and the NYSE, is expected to close in the fourth quarter.

FleetBoston closed trading Monday up 15/16 at 38 3/8.