SAN FRANCISCO (AP) - Shares of major Internet companies rose Tuesday as the broader market climbed and a Goldman Sachs analyst said he believes that fears about the sector being hurt by slower consumer and enterprise spending in Europe are “excessive.”
In a note to clients, Goldman analyst James Mitchell said the Internet sector’s performance has dropped during the second quarter, noting that Goldman Sachs’ sector index fell 17 percent between the end of March and the end of June while the S&P 500 dropped just 12 percent. He attributed the decline to worries about the health of spending in Europe, fluctuations in foreign exchange rates and issues related to Google’s growth prospects.
Mitchell said these worries have been blown out of proportion, saying that Internet companies are mostly exposed to northern European countries, “which have either followed the U.S. into the downturn and stabilization (such as the U.K.) or are less indebted at the consumer level than the U.S. was in 2008 (such as Germany).”
Shares of online search leader Google Inc. rose $13.37, or 2.8 percent, to finish trading at $489.20, while shares of rival Yahoo climbed 58 cents, or 3.9 percent, to $15.52. Shares of online auction site operator eBay Inc. rose 79 cents, or 3.9 percent, to finish at $21.01. Online retailer Amazon.com Inc.’s stock climbed $4.14, or 3.5 percent, to $123.65.
Elsewhere in the sector, shares of online travel company Priceline.com Inc. jumped $12.32, or 6 percent, to $216.32, while shares of rival Expedia Inc. climbed 88 cents, or 4.7 percent, to close at $19.70. Shares of Orbitz Worldwide Inc. rose 21 cents, or 4.8 percent, to $4.57.
Mitchell also said that some companies, such as Amazon and the online travel companies, posted growth even as the U.S. economy slumped, so he thinks they can continue to grow despite economic issues in Europe.
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