Evening Update: Brown Brothers Throws in the Stock-Coverage Towel

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M&A Earnings/revenue Offerings/stock actions Miscellany

One of Wall Street's oldest investment banking firms, Brown Brothers Harriman, said it would cut 78 jobs, citing increasing competition from larger, rival investment banks. The private bank said it would no longer offer research on companies and will cut related sales and trading jobs, most of them in New York. Brown Brothers said it had become costly to retain top talent as it faced one of the tightest labor pools in U.S. history.

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Chase Hambrecht & Quist priced 3.8 million shares of First Horizon Pharmaceutical (FHRX Quote) at $8 a share, the low end of the estimated $8-to-$10 range. The company markets and sells brand-name prescription drugs largely focused on chronic conditions. Earlier today, the range was lowered from $12 to $14 a share.

Major Indices INDEX CHANGE % VALUE YR TO DATE Dow -4.80 -0.05% 10,522.33 8.5% S&P 500 -1.85 -0.13% 1420.60 -3.3% Nasdaq -58.55 -1.69% 3400.93 -16.4% Russell 2000 -0.52 -0.11% 476.18 6% TSC Internet -24.27 -2.97% 792.09 -31.4% TSC New Tech 30 -48.03 -9.43% 461.36 -25.3% NOTE CHANGE PRICE YIELD 10-Year Treasury -19/32 101 17/32 10/32 6.285%

In other postclose news (earnings estimates from First Call/Thomson Financial; earnings reported on a diluted basis unless otherwise specified):

Mergers, acquisitions and joint ventures

Aetna (AET Quote) confirmed it resumed talks with Dutch financial services company ING Groep (ING Quote) about a sale of its profitable financial services and international units. Aetna's statement came after a report on CNBC, which said ING could pay as much as $9 billion for the units.

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Earnings/revenue reports and previews

Advo (AD Quote) said its revenue growth for the third will be substantially higher than previously expected, growing between 9% and 11% over the year-ago quarter. The direct-mail marketing said it is generating strong growth in its traditional and new client categories, boosted by a strong Easter mailing season. Given its strong revenue expectations, the company said it is cautiously optimistic that it will exceed its EPS estimate, currently at 68 cents by five analysts.

American Eagle Outfitters (AEOS Quote) said May same-store sales fell 1%.

Covance (CVD Quote) warned its second-quarter earnings will fall more than 50% below forecasts, saying weakness in its late-stage drug test business which hurt total profits. The current 11-analyst estimate calls for earnings of 21 cents, while the company said it expects to report earnings between 9 cents and 10 cents a share. Covance said the shortfall would force it to restructure operations, which will involve cutting 200 of its 7,600 worldwide jobs, closing offices and taking a $15 million pretax charge as it aims to reduce overhead and capacity. Covance said the new restructuring is expected to deliver pretax savings of about $16 million by 2001.

CSK Auto (CAO Quote) posted first-quarter earnings of 46 cents a share, in line with the eight-analyst estimate and up from the year-ago 34 cents.

Gap (GPS Quote) said its May same-store sales fell 2%.

Gemstar (GMST Quote) posted fourth-quarter earnings of 17 cents a share, beating the seven-analyst estimate of 14 cents and the year-ago earnings of 9 cents.

Net2Phone (NTOP Quote) posted a third-quarter loss of 21 cents a share, a penny narrower than the six-analyst estimate, but wider than the year-ago loss of 3 cents.

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Offerings and stock actions

iPass asked regulators to withdraw its planned $100 million initial public offering citing market conditions. The company's global network allows people to access corporate networks or the Internet from any location.

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Miscellany

Microsoft (MSFT Quote) criticized a government proposal to split up the firm in order to prevent future antitrust violations, calling it defective, vague and ambiguous.

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