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Tuesday, December 15, 2009

E-commerce stocks get a bounce from strong online holiday sales

Wall Street was impressed with online retail sales over the Thanksgiving period, and it showed up last week in strong gains in share prices for e-commerce stocks.

The Internet Retailers Online Retail Index gained 5.2% for the week, while the Dow Jones Industrial Average was up only 0.8% and the Standard & Poor's 500 Index advanced only 1.3%.

"Stronger than expected online spending data contributed to share prices moving higher," says analyst Colin Sebastian of Lazard Capital Markets. "We are still looking for ongoing healthy online trends over the remainder of the shopping season, however growth rates may moderate a bit." Sebastian predicts 3-5% growth in online sales for the holiday period. Web measurement firm comScore Inc. reported online sales grew 7.4% from Thanksgiving Day through last Monday.

Analysts from such Wall Street firms as UBS Securities LLC and Morgan Stanley, as well as Lazard's Sebastian, issued reports noting the strong online retail sales. All three reports highlighted e-commerce technology provider GSI Commerce Inc. as one of the companies likely to benefit from consumer spending shifting to the web. GSI's stock was up nearly 9% last week.

Overall, 22 of the 25 online retailer and e-commerce technology provider stocks tracked by the Internet Retailer Online Retail Index gained for the week. Leading the way was, which reported it had its best day ever on the Monday after Thanksgiving, typically one of the heaviest online shopping days of the holiday season.

Here are the best-performing stocks last week in the Online Retail Index and the percentage price increase for each:
  •, 17%
  •, 14.8%
  • VistaPrint, 10.5%
  • CyberSource, 9.8%
  • GSI, 8.9%

Here are the Online Retail Index stocks that performed least well last week and the percentage change in stock price for the week:

  • Netflix, -2.8%
  • American Greetings, -1.0%
  •, -.9%
  • Digital River, +.3%
  • Overstock, +1.8%

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