The second-biggest U.S. stock exchange also said it had increased its stake to 28.75 percent by buying a further 7 million LSE shares at 1,243 pence apiece, at a cost of 87.8 million pounds, strengthening its hand against any possible counter-bid.

The move comes as the world's stock markets are rushing to consolidate, under pressure from customers to cut fees and offer global services, and a group of banks added to the pressure last week by announcing plans to create their own pan-European equity trading platform next year.

Competition between established exchanges and alternative platforms will be made possible by the European Union's Markets in Financial Instruments Directive (MiFID), which comes into effect next year.

"The banks' initiative has undermined the LSE's value and Nasdaq is using this weakness to strike a deal," said one analyst who declined to be named.

Shares in the LSE were up 6.2 percent at 1,293 pence in midday trade, valuing it at around 3.2 billion pounds.

Dealers said the shares were rising on expectations that the LSE may find a 'white knight' to rival Nasdaq's offer or that the LSE board may agree to a higher offer now that increased competition to its exchange is on the cards.

"Clara Furse (the LSE's Chief Executive) will be rushing around to find a white knight, maybe OMX or Deutsche Boerse. Or maybe the board will agree to a higher offer, say around 1,300 pence," said one senior dealer in London.

The LSE declined to comment, but is expected to release a statement via the Regulatory News Service later today.

TRANS-ATLANTIC RACE

The race has been on to create the first trans-Atlantic stock exchange. Both Nasdaq and archrival NYSE Group Inc., the world's largest stock exchange, have been pushing for overseas expansion in an effort to boost their product offerings and geographical reach in an increasingly competitive and commoditized industry.

While Nasdaq has been building its stake in the LSE, NYSE has been pursuing Paris-based exchange Euronext, a deal it struck earlier this year which is awaiting shareholder approval.

A source familiar with the matter said Nasdaq took advantage of recent falls in the LSE's valuation to make an offer today.

The source added that the New York-based exchange decided against waiting until April, when it could have bid less, because this would have seen it fall behind rivals such as NYSE in the current wave of exchange consolidation.

Nasdaq's new bid is 40 percent above its previous offer in March, but close to the level at which the second biggest U.S. stock market paid for most of its stake.

Nasdaq said the deal would create the world's biggest exchange by number of listings, including over 6,400 companies with a market value of $11.8 trillion, as well as the most active exchange with an average daily volume of 7.4 billion shares traded.

UK Treasury minister Ed Balls said Britain will not stand in the way of Nasdaq's bid.

Nasdaq's Chief Executive Bob Greifeld said the combined enterprise will have a breadth of products to compete effectively with any threat from the banks.

"We've always operated in a competitive environment. The fact that you will have competition in the London market is something we respect," Greifeld told journalists on a conference call.

The LSE has long been viewed as a takeover target because it is a relatively small company, compared with many of its rivals which have branched into other trading platforms. However, the firm has rejected approaches from all of its suitors to date.

"Given that the (LSE) shares were trading above 1300 pence in the middle of last week, we expect the exchange will reject this renewed advance," said Bridegwell Securities analyst Katrina Preston.

Nasdaq said it would retain the LSE brand and that the London exchange would continue to be regulated solely by the UK's Financial Services Authority.

The planned purchase would vault the giant consumer bank to the top tier of private banks, creating a new leader in the increasingly lucrative business of managing rich people's money, the paper said.

Schwab and Bank of America were not immediately available for comment.

Bank of America, whose 5,800 branches stretch from coast to coast, has been trying to leverage its size and distribution network to gain market share in areas where it has been weak, the Wall Street Journal said.

Last month, Bank of America announced free stock trades for many customers in an attempt to beef up its brokerage business and persuade customers to centralize their assets.

Buying U.S. Trust solves one of the company's longstanding problems -- trying to break into the elite world of wealth management. With U.S. Trust, Bank of America gets one of the most vaunted names in the wealth-management world.

The oil sector overall growth in the oil sector actually fell. Public sector oil growth was at 0.9%, while the private oil sector fell by 11.2%. This was partly due to maintenance activities, but private companies blame the down time due to the renegotiation of their operating contracts early this year. The combined growth figure for the oil sector compared with last year was down 1.8%.

Contrary to the image of the Venezuelan government and its president, overall private sector growth eclipsed the public sector figure. The private sector grew by 12.3%, while the public sector grew by only 2.7%. Private sector investment in high value added activities of the manufacturing process was 11%, which accounts for a large chunk of the private sector growth. Government spending on the building trade was up 35% relative to last year's figures.

In fact, the communication, retail, construction, and manufacturing industries all posted double-digit growth figures. The bank said this was due to the continuing high levels of liquidity in the economy.

These figures suggest the bank may have underestimated the annual growth figure of 9% for this year.

Garlinghouse, a second-tier Yahoo executive who has taken increasing powerful roles in the company since joining 3 1/2 years ago, argues that Yahoo suffers from a lack of consistent leadership, business focus and a "single cohesive strategy."

"We lack a focused, cohesive vision for our company," Garlinghouse writes. "We want to do everything and be everything -- to everyone."

The document was published in the Saturday edition of the Wall Street Journal. A Yahoo spokesman confirmed the authenticity of the memo, but declined to comment directly on details contained in the memo or in the newspaper story.

The Journal story also describes rumors that Chief Operating Officer Dan Rosensweig and Chief Financial Officer Sue Decker could be elevated to become co-presidents, in preparation for the retirement of Chairman and Chief Executive Terry Semel, age 64, who joined Yahoo five years ago.

The call for restructuring follows a series of embarrassments that have caused Yahoo shares to lose 31.5 percent of their value so far this year. It is struggling with a slowdown in parts of its advertising business while racing to keep pace with far-faster growing rival Google Inc..

The memo -- known as "The Peanut Butter Manifesto" because it argues that Yahoo's investment strategy is like spreading peanut butter too thinly on bread -- argues for a "radical reorganization" of the 12-year-old Internet media giant.

JOB CUTS URGED

"I hate peanut butter," Garlinghouse writes.

The Yahoo executive said the company should cut its work force by 15 percent to 20 percent as part of a plan to reshape the current business unit structure and eliminate the bureaucratic duplication of functions that exist across Yahoo.

The Sunnyvale, California-based company has nearly 10,000 employees worldwide.

"There are so many people in charge (or believe that they are in charge) that it's not clear if anyone is in charge."

"I believe we must embrace our problems and challenges and that we must take decisive action," the memo states bluntly.

Garlinghouse names a variety of duplicative groups that pit established business units against new initiatives, including music, photos, search, applications, social networks, global strategy and even who controls the Yahoo home page.

In a statement, Yahoo's leadership has defined three areas of focus for its business.

During its quarterly financial conference call last month, Semel described efforts to close the gap with rival Google Inc. in how much revenue it generates from its search business, increase its lead in brand advertising and get a jump on emerging markets like video, mobile and social networks.

"The memo itself highlights that we have an open, collaborative culture and a senior management team that is intensely committed to helping Yahoo! fulfill its potential as an Internet leader," the Yahoo statement said.

The Journal said the memo has received support from Yahoo senior management and that Garlinghouse had been asked to head an internal committee to investigate the issues he raises.

"All is not well," Garlinghouse writes. The memo itself was written in response to an October 11 New York Times article that he describes as "a painful public flogging."

"While it lacked accurate details, its conclusions rang true, and thus was a much needed wake up call," the Yahoo executive writes. "It's time for us to get back up."