Analysts have hurried to trim earnings outlooks for banks that specialize in securities processing and asset management in recent weeks because they say that the ongoing market volatility has affected the sector and dragged down stock prices.

On Monday Andrew Collins, an equity analyst with U.S. Bancorp Piper Jaffray, issued new 2001 estimates for both State Street Corp. and Bank of New York Co. Inc., cutting his estimate on Boston-based State Street to $1.99, a penny below the Thomson Financial/First Call consensus. Mr. Collins also cut 5 cents from his 2002 estimate for State Street, to $2.20 a share. "Lower global equity markets have been very weak and are likely to have a negative impact on State Street's investment management and processing-related revenue growth." Mr. Collins said. "It's a valuation call."

Meanwhile, Mr. Collins cut 2 cents from his 2001 estimate for Bank of New York, to $2.08 per share, 3 cents below the First Call consensus; and slashed 6 cents from his 2002 earnings estimate, to $2.32.

Lower trading revenues and a sudden impact on volume have affected Bank of New York, he said.

"In recent weeks a lot of these reductions have been priced into the stocks," said Mr. Collins, who maintains his "buy" rating on Bank of New York and his "neutral" rating on the Boston company. Mr. Collins also left his third-quarter estimates on both State Street and Bank of New York unchanged.

Credit Suisse First Boston analyst Susan Roth cut her third-quarter per-share earnings estimate on Bank of New York to 50 cents from 52 cents in a research note Monday. Ms. Roth also cut 5 cents from her 2001 estimate, to $2.05 and 5 cents from her 2002 estimate, to $2.35.

"Given this quarter's lack of volume, lack of ADR activity, and declines in asset values, we expect securities processing fees to be down 5% to 7% sequentially," Ms. Roth, who has a "buy" rating on Bank of New York shares, wrote in her research note.

Ms. Roth also reduced yearly estimates for Northern Trust Corp. of Chicago, which specializes in trust and wealth management. She cut her 2001 earnings estimate to $2.28 from $2.30, and her 2002 estimate to $2.55 from $2.60. First Call consensus 2001 estimate for Northern Trust is $2.29 a share. Her third-quarter estimate remains at 57 cents, a penny below consensus.

"Focusing in on the third quarter, we expect to see positive sequential comparisons out of the personal finance services business, offset by lower corporate and institutional services trust fees," she wrote about Northern Trust.

Northern Trust shares rose 0.25% on Monday.

At the close of trading Monday, State Street shares rose 1.68% and Bank of New York shares rose 2.83%. Friday the New York company reached a new 52-week low of $35.80.

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