RealTime IT News

Google, Yahoo Fall On UBS Outlook

UBS took the ax to two of the Internet's leading names on Friday, saying their shares had become fully valued.

Google fell 8.3% to $169.35 after UBS initiated coverage of the recent IPO with a Reduce rating and $160 price target. Shares of Google have fallen 15% since the stock failed to take out the $200 level earlier this week.

Analyst Benjamin Schachter predicted that Google will grow more slowly in 2005 and margins will deteriorate, leading to a lower valuation, and new shares coming out of lockup will also pressure the stock. He said Google is also potentially "on a collision course with Microsoft" .

"We consider Google a great company, but believe investors will see better entry points in the future," Schachter wrote.

Schachter was somewhat kinder to Yahoo, rating the company Neutral with a $37 price target. Yahoo shares lost 3.5% to 36.35.

The broader market rose Friday on news that jobs grew at the strongest rate in seven months in October.

The Nasdaq gained 15 to 2038, the S&P 500 rose 4 to 1166, and the Dow climbed 72 to 10,314. Volume declined to 1.73 billion shares on the NYSE, but rose to 1.91 billion on the Nasdaq. Decliners held a slight edge on the NYSE, while advancers 18-12 on the Nasdaq. Upside volume was 65% on the NYSE, and 72% on the Nasdaq. New highs-new lows were 461-7 on the NYSE, and 223-25 on the Nasdaq.

Nvidia , ValueClick , Wireless Facilities and Bsquare surged on their results.

WebMD , Loudeye , eSpeed , Cray , 24/7 , Conexant and OpenTV fell on their results.

Research In Motion tumbled 12% on patent concerns.

Macrovision fell 5% on a report that the Shrek 2 DVD didn't use the company's protection technology.