Google, Yahoo Ride Upgrades Higher

Google and Yahoo started 2005 in the green Monday after Goldman Sachs said it sees the two companies benefiting from strong online advertising spending trends.

Goldman analyst Anthony Noto said he sees branded online advertising becoming a permanent part of the overall advertising mix. Demand is strong, and there is a shortage of inventory on the major portals, he said.

“2005 could be a breakout year for branded online advertising,” he said, adding that paid search is also strong.

Noto raised estimates on Google and Yahoo, which gained 5% and 1%, respectively. Yahoo reports earnings Jan. 18, and Google Feb. 1.

The broader market started the new year with strong gains early Monday, but reversed on a weak construction spending report and nervousness about Friday’s jobs report.

The Nasdaq fell 23 to 2152, the S&P 500 lost 9 to 1202, and the Dow gave back 53 to 10,729. Volume rose to 1.5 billion shares on the NYSE, and 2.22 billion on the Nasdaq. Decliners led 24-9 on the NYSE, and 22-9 on the Nasdaq. Downside volume was 78% on the NYSE, and 72% on the Nasdaq. New highs-new lows were 180-10 on the NYSE, and 158-9 on the Nasdaq.

Sun fell 5% after Bernstein downgraded the stock. Sun reports earnings on Jan. 13.

Nortel rose 2% on news that the NYSE has given the company until March 31 to file its 2003 annual report.

Perficient soared 41% after the company raised guidance.

Tellabs gained 7% on an upgrade, while Sycamore fell 6% on a downgrade.

Microvision climbed 3% on a deal with Johnson and Johnson .

And Roxio began trading as Napster under the Nasdaq symbol NAPS.

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