Baidu Inc. fell the most since August in New York after Credit Suisse Group AG became the third investment bank this month to cut its recommendation on the owner of China’s most popular search engine.
American depositary receipts of Beijing-based Baidu dropped 6.2 percent to $107.16 at 11:15 a.m., the biggest slump since Aug. 29.
Baidu was cut to underperform from neutral at Credit Suisse a week after Jefferies Group Inc. lowered its recommendation on the shares to hold from buy, and Raymond James Financial Inc. reduced its rating to outperform from strong buy.
Qihoo 360 Technology Co.’s entrance in China’s Internet search market will cut into Baidu’s sales and profit, the three banks said.
Baidu’s domination of the Internet search market is “waning,” Wallace Cheung, an analyst at Credit Suisse in Hong Kong, wrote in an e-mailed report today. A slowing Chinese advertising market will also put pressure on the company’s profit, he said.