New York--Merrill Lynch & Co. again downgraded its ad spending forecast, predicting the first two-year decline since the Depression. Merrill analyst Jessica Reif Cohen, whose ad spending predictions are widely followed on Wall Street and Madison Avenue, said U.S. ad spending will drop 3% this year. Quashing hopes of a quick recovery, Reif Cohen is also pessimistic about next year's ad spending prospects, forecasting a 1% drop. In a report, Reif Cohen said the dot-com fallout, the tragic events of Sept. 11 and an absence of political and Olympic advertising all contributed to Merrill's dismal projection for this year. Reif Cohen did find room for some optimism. She said the upcoming Winter Olympic Games in Salt Lake City, the congressional elections and government economic stimulus packages will lead to a second-half recovery in 2002. Institutional Investor recently ranked Reif Cohen as a top broadcasting analyst.