Blue Nile shares decline to 52-week low

The stock rose 18 cents to close at $36.02, after bottoming at $33.76 earlier in the session, a level not seen since December 2006.

Citi Investment Research analyst Mark S. Mahaney, citing data from online traffic research firm comScore Inc., said Blue Nile's cumulative unique visitors declined 17 percent in the second quarter, compared with a year ago.

"Traffic to Blue Nile has been down year over year in nine out of the last 12 months, and when combined with the macroeconomic overhang, we view the second-quarter datapoint as a clear negative for Blue Nile," Mahaney wrote in a note to investors.

Mahaney, who rates the stock "Hold" with a $47 price target, said anecdotal evidence has shown that jewelry and bridal related industry trends have been soft so far this year.

He also lowered his second-quarter profit estimate by a penny to 17 cents per share and expects sales of $72 million, from $74.6 million previously.

Last month at a conference, Blue Nile President and Chief Executive Diane Irvine said sluggish spending from consumers has affected sales, but said international markets remained bright growth prospects.

A representative for Blue Nile did not immediately return a call for comment.

On Wall Street, stocks opened sharply lower on concerns facing the financial sector and the ongoing mortgage crisis. The Dow Jones industrial average fell more than 200 points earlier in the session, and Federal Reserve Chairman Ben Bernanke said the U.S. economy faces numerous difficulties.