NEW YORK – US Airways said Thursday that Merrill Lynch has agreed to buy 19 million of the airline’s shares in a new public offering.

Merrill Lynch is the sole underwriter of the deal. The firm’s stock rose 2% in afternoon trading.

The carrier said it requested a suspension in trading “to permit an orderly distribution of the new shares.”

The New York Stock Exchange said it shut down trading for part of the day. But trading resumed Thursday afternoon, and US Airways shares fell more than 3%.

US Airways’ stocks have been wildly volatile in recent months. The airline’s shares are down 38% year-to-date, which is even worse than other carriers in the money-losing sector. But US Airways is stock is up more than 370% from a month ago, when it bottomed-out to penny stock levels.

Airline stocks have turned higher in recent weeks, as soaring oil prices – the industry’s biggest nemesis – continue falling. Oil prices were around $115 a barrel Thursday, down from their July 11 record of $147.27.

Raymond Neidl, airline analyst for Calyon Securities, said that he was not surprised by the deal, given the recent upturn.

“I predicted in my report back in July that airlines would be doing everything they could to raise cash going into the winter,” said Neidl. “With the recent rally in airline stocks, that made it even more tempting to do a stock offering.”

The announcement came as Merrill tries to recover from a string of bad bets in the imploded housing market. In mid-July, the company booked a nearly $5 billion loss, as it took massive writedowns on its mortgage-related portfolio.

At the time, Merrill also announced plans to sell roughly $8 billion worth of assets, including its 20% stake in the media outlet Bloomberg LP, in order to raise capital.

It followed that up nearly two weeks later by selling a large portion of its troubled asset-backed securities and announcing a stock sale as part of an effort to raise $8.5 billion in fresh capital.

The company has now lost more than $19 billion in the past 12 months, making it one of the hardest-hit companies during the credit crisis roiling the nation’s big financial services firms.

US Airways is the No. 6 carrier among the U.S.-based airlines, behind AMR Corp.’s American Airlines, UAL Corp.’s United Airlines, Delta Air Lines, Continental Airlines and Northwest Airlines.

Merrill is the third-largest securities company in terms of annual sales, behind Goldman Sachs and Morgan Stanley.