Wednesday, July 15, 2009

Diamond plays see morning volume spike (NILE, FUQI)

Shares of jewelers Blue Nile Inc. (NILE) and Fuqi International Inc. (FUQI) appear to be rising on speculation that recent stock price declines on fears of slack demand for luxury items may be overdone. Citigroup upgraded shares of Blue Nile to Buy from Hold, citing reasonable earnings estimates, citing in part greater price flexibility given that lustrous parcel prices are down 12 to 15 percent year-over-year. Shares are up 9 percent, trading at most 70 percent of average daily volume as of 11:15 Eastern. The upgrade and pricing observation also may be benefiting small-cap play Fuqi, based in China. Its shares are up more than 7 percent to $16.86, already trading more than its average daily volume. — Mike Tarsala


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