“When Oracle held a conference call last week to make its case for acquiring PeopleSoft, the questions from Wall Street’s top software analysts came fast and furious. Asking the all-important first question was Heather Bellini, a former Smith Barney applications software analyst who is now at UBS Warburg,” writes Landon Thomas in today’s New York Times.

“From Smith Barney there was silence. Alone among the big Wall Street firms, Smith Barney lacks an Oracle analyst right now. That puts it in the awkward position of not having someone to explain to its institutional and retail investors the biggest deal so far this year.”

“There are other top-flight companies that Smith Barney research analysts do not now cover, among them Motorola, Exxon Mobil, Morgan Stanley, Microsoft, Tenet Healthcare and Nike, according to Bloomberg News data.”

“Since Sanford I. Weill, the chairman of the parent Citigroup, hired Sallie L. Krawcheck to run the Smith Barney research operations last October, 16 experienced analysts of about 60 who covered stocks in the United States have left the firm, whether of their own accord or not. Most recently, eight analysts were dismissed last month, and coverage of 117 companies was suspended, with some of it to be resumed at a later date.”

“The departing analysts assessed businesses ranging from oil to software to securities to airlines. In all, Smith Barney has at least temporarily discontinued coverage of close to 250 companies — leaving a big gap with regard to a number of important industries. The firm now covers 700 companies in the United States.”

“Other firms besides Smith Barney have been caught without analyst coverage. Merrill Lynch, for example, had no one assessing McDonald’s late last month, when the share prices of fast-food restaurants and meat processors dropped after the discovery of a case of mad cow disease in Canada.”

“But while firms across Wall Street have been cutting back on the companies their analysts cover, few have recently taken steps as stark as Smith Barney has.”

“And for Ms. Krawcheck’s analysts, many of whom had become accustomed to star treatment during the bull-market years, her changes have been jarring. Not only is she demanding a better brand of research product, but by discontinuing coverage of so many companies, she is also saying in effect that much of their past efforts were inadequate. Now, the analysts find themselves having to justify their existence.”