424B3 1 f424b3_021207-market.txt PROSPECTUS SUPPLEMENT EXHIBIT 99.1 (To Prospectus dated February 17, 2006) REGISTRATION NO. 333-37980 HOLDERS(SM) MARKET 2000 LOGO] 1,000,000,000 Depositary Receipts Market 2000+ HOLDRS (SM) Trust This prospectus supplement supplements information contained in the prospectus dated February 17, 2006 relating to the sale of up to 1,000,000,000 depositary receipts by the Market 2000+ HOLDRS (SM) Trust. The share amounts specified in the table in the "Highlights of Market 2000+ HOLDRS" section of the base prospectus shall be replaced with the following: Share Primary Name of Company (1) Ticker Amounts Trading Market ------------------------------------------- ------ ---------- -------------- Agere Systems Inc. AGR 0.11013698 NYSE Alcatel-Lucent (2) ALU 0.7808 NYSE American International Group, Inc. AIG 2 NYSE Astrazeneca p.l.c. * AZN 4 NYSE AT&T Inc. T 4.935304 NYSE AVAYA Inc. AV 0.3333 NYSE BellSouth Corporation BLS 5 NYSE BP p.l.c. * BP 3 NYSE Bristol-Myers Squibb Company BMY 3 NYSE BT Group p.l.c BT 2 NYSE CBS Corporation Class B "New" CBS 1.5 NYSE Cisco Systems, Inc. CSCO 3 NASDAQ Citigroup Inc. C 3 NYSE Comcast Corporation CMCSA 1.941 NASDAQ The Coca-Cola Company KO 3 NYSE Dell Inc. DELL 5 NASDAQ Deutsche Telekom AG * DT 5 NYSE Eli Lilly and Company LLY 2 NYSE EMC Corporation EMC 2 NYSE Exxon Mobil Corporation XOM 4 NYSE France Telecom * FTE 2 NYSE General Electric Company GE 3 NYSE GlaxoSmithKline p.1.c GSK 3 NYSE Hewlett-Packard Company HPQ 4 NYSE Home Depot, Inc. HD 4 NYSE Idearc Inc. (3) IAR 0.2 NYSE Intel Corporation INTC 2 NASDAQ International Business Machines Corporation IBM 2 NYSE JDS Uniphase Corporation (4) JDSU 0.25 NASDAQ Johnson & Johnson JNJ 4 NYSE LM Ericsson Telephone Company * ERIC 0.9 NASDAQ McDATA Corporation MCDTA 0.07361380 NASDAQ Medco Health Solutions MHS 0.3618 NYSE Merck & Co., Inc. MRK 3 NYSE Microsoft Corporation MSFT 6 NASDAQ Morgan Stanley MWD 2 NYSE -------------------------------------------------------------------------------- (continued on following page) Share Primary Name of Company (1) Ticker Amounts Trading Market ------------------------------------------- ------ ---------- -------------- Nippon Telegraph and Telephone Corporation * NTT 3 NYSE Nokia Corp. * NOK 4 NYSE Nortel Networks Corporation (5) NT 0.2 NYSE Novartis AG * NVS 5 NYSE Oracle Corporation ORCL 4 NASDAQ Pfizer Inc. PFE 4 NYSE Qwest Communications International Inc. Q 4 NYSE Sony Corporation * SNE 2 NYSE Sun Microsystems, Inc. SUNW 4 NASDAQ Syngenta AG SYT 1.03860890 NYSE Texas Instruments Incorporated TXN 3 NYSE The St. Paul Travelers Companies, Inc. STA 0.17158726 NYSE Time Warner Inc. TWX 6 NYSE TOTAL S.A. * TOT 4 NYSE Toyota Motor Corporation * TM 2 NYSE Verizon Communications VZ 4 NYSE Viacom Inc. Class B "New" VIA.B 1.5 NYSE Vodafone Group Plc* VOD 4.375 NYSE Wal-Mart Stores Inc. WMT 4 NYSE Zimmer Holdings, Inc. ZMH 0.3 NYSE ------------------------------------------ (1) The merger of BellSouth Corporation (NYSE Ticker: "BLS") and AT&T Inc. (NYSE Ticker: "T"), two of the constituents of the Market 2001+ HOLDRS Trust, was consummated on December 29, 2006. Effective January 3, 2007, BellSouth Corporation will no longer be an underlying constituent of the Market 2001+ HOLDRS Trust. For the 5 shares of BellSouth Corporation per 100 shares round lot of Market 2001+ HOLDRS, The Bank of New York received 6.625 shares of AT&T Inc. Effective January 3, 2007, creations and cancellations of Market 2001+ HOLDRS Trust require 11.560304 shares of AT&T Inc. (2) On November 30, 2006 the merger of Lucent Technologies Inc. (NYSE ticker "LU"), a constituent of the Market 2001+ HOLDRS Trust, and Alcatel (NYSE ticker "ALA") became effective. Immediately following the merger, Alcatel S.A. changed its name to Alcatel-Lucent (NYSE ticker "ALU"). As a result Alcatel-Lucent will replace Lucent Technologies Inc. as an underlying security of the Market 2001+ HOLDRS Trust. For each share of Lucent Technologies Inc. held, shareholders received 0.1952 shares of Alcatel-Lucent. For the 4 shares of Lucent Technologies Inc. per 100 shares round lot of Market 2001+ HOLDRS, The Bank of New York received 0.7808 shares of Alcatel-Lucent. Effective December 1, 2006, creations of Market 2001+ HOLDRS require 0.7808 shares of Alcatel-Lucent per 100 share round lot of Market 2001+ HOLDRS. (3) Effective November 24, 2006, as a result of the spin-off of Idearc Inc. (NYSE ticker "IAR WI") from Verizon Communications Inc. (NYSE ticker "VZ"), a component of the Market 2000+ HOLDRSSM Trust, Idearc Inc. will be added as an underlying security of the Trust. For every share held of Verizon Communications Inc. holders received 0.05 shares of Idearc Inc. For the 4 shares of Verizon Communications Inc. per 100 share round lot of Market 2000+ HOLDRS, The Bank of New York received 0.2 shares of Idearc Inc. Creations/cancellations of Market 2000+ HOLDRS require 0.2 shares of Idearc. Inc. (4) The quantity of shares of JDS Uniphase Corporation (NASDAQ ticker "JDSU" ) represented by each 100 share round lot of Market 2000+ HOLDRS decreased from 2 to 0.25 shares due to the 1 for 8 reverse stock split of JDS Uniphase Corporation. Effective October 18, 2006, due to the reverse stock split, deposits of JDS Uniphase Corporation, for creation of Market 2000+ HOLDRS decreased to 0.25 instead of 2, per round lot of 100 Market 2000+ HOLDRS. Further, effective November 14, 2006, JDS Uniphase Corp. changed its NASDAQ Ticker symbol from "JDSUD" to "JDSU." (5) Effective December 1, 2006, due to the 1 for 10 reverse stock split of Nortel Networks Corp. New. (NYSE ticker Symbol "NT") the quantity of shares of Nortel Networks Corp. New (Ticker Symbol "NT") represented by each 100 share round lot of Market 2000+ HOLDRS decreased from 2 to 0.2 shares. Effective December 1, 2006 Nortel Networks Corp. New begin trading under NYSE ticker "NT." Further, due to the reverse stock split, deposits of Nortel Networks Corp. New for creation of Market 2000+ HOLDRS decreased to 0.2 NT, instead of 2 "NT," per round lot of 100 Market 2000+ HOLDRS. * The securities of these non-U.S. companies trade in the United States as American Depositary Receipts. Please see "Risk Factors" and "United States Federal Income Tax Consequences--Special considerations with respect to underlying securities of foreign issuers" for additional information relating to an investment in a non-U.S. company. The share amounts listed in the table above reflect all previous stock splits, dividends and business combination transactions. The date of this prospectus supplement is December 31, 2006.