RULE NO. 424(B)(3)
                                                      REGISTRATION NO. 333-89355

PROSPECTUS SUPPLEMENT No. 2
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(To Prospectus dated November 22, 1999)


                                [GRAPHIC OMITTED]


                        1,000,000,000 Depositary Receipts
                             Biotech HOLDRsSM Trust

This prospectus supplement amends and supplements certain information contained
in the accompanying prospectus dated November 22, 1999 relating to the sale of
up to 1,000,000,000 depositary receipts by Biotech HOLDRsSM Trust.

The share amounts specified in the table on page 9 of the accompanying
prospectus shall be replaced with the following:




                                                                                                     Primary
                                                                                                     Trading
                   Name of Company                            Ticker           Share Amounts          Market
                   ---------------                            ------           -------------         -------
                                                                                            
                      Amgen Inc.                               AMGN                  46               NASDAQ
                   Genentech, Inc.                              DNA                  22                NYSE
                     Biogen, Inc.                              BGEN                  13               NASDAQ
                Immunex Corporation(1)                         IMNX                  14               NASDAQ
             PE Corp-PE Biosystems Group                        PEB                 18*                NYSE
                  MedImmune, Inc.(2)                           MEDI                  5                NASDAQ
                  Chiron Corporation                           CHIR                  16               NASDAQ
                 Genzyme Corporation                           GENZ                  7                NASDAQ
                Gilead Sciences, Inc.                          GILD                  4                NASDAQ
                    Sepracor Inc.                              SEPR                  6*               NASDAQ
           IDEC Pharmaceuticals Corporation                    IDPH                  4*               NASDAQ
             QLT Photo Therapeutics Inc.                       QLTI                  5                NASDAQ
         Millennium Pharmaceuticals, Inc. (3)                  MLNM                  3                NASDAQ
                 BioChem Pharma Inc.                           BCHE                  9                NASDAQ
                   Affymetrix, Inc.                            AFFX                  2                NASDAQ
             Human Genome Sciences, Inc.                       HGSI                  4*               NASDAQ
                   ICOS Corporation                            ICOS                  4                NASDAQ
                     Enzon, Inc.                               ENZN                  3                NASDAQ
                   Celera Genomics                              CRA                  4*                NYSE
                    Alkermes, Inc.                             ALKS                  2                NASDAQ



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*  Reflects adjustment for previous stock split.

(1)  Immunex Corporation has declared a three-for-one stock split on its common
     stock, to be effected by means of a stock dividend to shareholders of
     record as of March 6, 2000. The shares of common stock will begin trading
     on a split-adjusted basis on March 21, 2000. At such date, the share amount
     of Immunex Corporation represented by a round-lot of 100 Biotech HOLDRs
     will be 42.

(2)  MedImmune, Inc. has declared a three-for-one stock split on its common
     stock, to be effected by means of a stock dividend to shareholders of
     record as of May 18, 2000. The shares of common stock will begin trading on
     a split-adjusted basis on June 5, 2000. At such date, the share amount of
     MedImmune, Inc. represented by a round-lot of 100 Biotech HOLDRs will be
     15.

(3)  Millennium Pharmaceuticals, Inc. declared a two-for-one stock split on its
     common stock, to be effected by means of a stock dividend to shareholders
     of record on March 28, 2000. The shares of common stock will begin trading
     on a split-adjusted basis on April 19, 2000. At such date, the share amount
     of Millenium Pharmaceuticals, Inc. represented by a round-lot of 100
     Biotech HOLDRs will be 6.

The stock prices in the tables set forth in Annex A of the accompanying
prospectus have not been and will not be, adjusted to account for any stock
splits.

            The date of this prospectus supplement is March 2, 2000.