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Morgan Stanley's Milunovich Heading to Merrill Lynch

By Justin Lahart
Staff Reporter

Steve Milunovich, a computer analyst at

Morgan Stanley

is heading downtown.

In a rare mid-year move, Milunovich is taking a job at

Merrill Lynch

to follow computers, particularly


(IBM) - Get International Business Machines (IBM) Report

, according to people familiar with the move. Milunovich is expected to succeed the retiring Daniel Mandresh, the Street's leading voice on IBM.

Grabbing Milunovich is certainly a coup for Merrill Lynch, especially since they are losing the high-profile Mandresh. Terms of the deal were not disclosed.

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Both Milunovich and Mandresh are closely identified with Big Blue. In a

Wall Street Journal

story earlier this year, both analysts were quoted successively in describing IBM's second-quarter earnings. Mandresh called the quarter "good" and worthy of a "sigh of relief." Milunovich was more cautious, calling the quarter "relatively dull" and sales growth "slightly disappointing."

At the start of the year, Milunovich lowered his earnings expectations in anticipation of a "10%-to-15%" correction in the stock, though he maintained his outperform rating on the stock. Since that time, IBM has gained 34%, compared with a 21% rise in the

S&P 500


Milunovich was a

Wall Street Journal

All-Star for earnings estimate accuracy in 1996, but he failed to make the list this year. Milunovich was an

Institutional Investor All-American

in 1996.

Morgan Stanley and Merrill Lynch officials both declined comment. Milunovich couldn't be reached for comment.