Blue Nile shares up after positive analyst note

Shares of online diamond and jewelry retailer Blue Nile enjoyed an uptick today after a key analyst said the company's vital signs appear to be improving. Blue Nile was up more than 5 percent in afternoon trading, after Citigroup's Mark Mahaney said the company was in a better position than many of its competitors.

Here's a recap of Mahaney's note from AP:

Citi Investment Research analyst Mark S. Mahaney said traffic to the company's online site declined 25 percent in February compared with a year ago, but that was a slight improvement from a 34 percent drop in January.

Mahaney said Blue Nile is benefiting from several bankruptcies in the U.S. jewelry industry, including Whitehall Jewellers Inc., Friedman's Inc., Shane Co., Fortunoff and Christian Bernard.

Blue Nile posted a sharp drop in profit and sales in the fourth quarter of 2008, as people cut back on luxury items. The company declined to give any future revenue guidance, citing uncertainties about consumer spending.

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