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Updated from 7:23 a.m. EDT

FleetBoston Financial


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

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


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General Electric

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, 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


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.