Black Rock and Nuveen Investments aside, most mutual fund and financial service companies are reporting negative returns for the first quarter of the year, State Street and Mellon Financial among them.

State Street’s net income fell 46% to $96 million, down from $178 million a year ago. Mellon’s income was down 25% to $161 million, from $216 million in the first quarter of 2002.

"Our focus on relentless expense management has enabled us to maintain top-tier returns despite the persistence of challenging market and economic conditions," Martin G. McGuinn, Mellon chairman and chief executive officer, said in a statement.

State Street Chairman and Chief Executive David Spina was less sanguine. "The outlook remains uncertain, and it just isn’t clear to any of us when our base will start generating more revenue," Spina told analysts in a conference call, Reuters reports. "We are getting less revenue. Our clients are hurting, and they are leaning on us."

State Street’s earnings were also hampered by its $1.5 billion purchase of Deutsche Bank. The firm laid off 1,000 following the acquisition and, in another cost-cutting measure, recently announced plans to lay off another 1,800, representing 9% of its workforce.

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