Alphabet Tumbles After Citi Sees Slowdown in Search Ad Spending

Alphabet Inc. fell the most in almost two months Friday after Citigroup Global Markets said spending on Google ads may slow.

Citigroup Analyst Mark May said recent checks with two leading search engine marketing agencies suggest a “slight deceleration in the year over year growth rate for search marketing spend” in the second quarter compared with the first. “This could be slightly below current forecasts, though how to interpret the data and what to compare it with is sometimes up for debate.”

Alphabet, the parent company of Google, fell 2.3 percent to $694.13 at 2:29 p.m. in New York. Earlier it slid as much as 3.2 percent, its biggest intraday decline since April.

"There is a possibility that -- like in 1Q16 -- that 2Q16 gross revenue could again come in 1-2 percent below expectations," May said in the note to clients. May maintained his buy rating on Alphabet.

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