Hopes rise for internet stores

Shares in Amazon.com, one of the oldest and best known internet retailers, have soared by over a third.

The surprise surge came after it was revealed that the online store sold 12,000 more items per hour on Friday than it did on the same day the previous year.

The day after the Thanksgiving Holiday is traditionally the busiest day in the year for US retailers, and opens the official US shopping season which leads up to Christmas.

Other internet stocks were caught up in the renewed optimism for the future of e-tailing, and Yahoo gained 15% to close at $18.

The strength of Amazon and Yahoo helped the technology-rich Nasdaq index rise 2% to 1,941, its highest close since 14 August.

Combating recession

The surprisingly strong retail sales provided new hope for the US economy, on the day that leading economists have announced that America is officially in a recession.

Preliminary data for overall sales on Friday showed a 4% increase compared with the same day the previous year.

Some economists had been predicting that sales would slump by 4% or more.

Traditional stores were also faring well, with Wal-Mart Stores, the world's largest retailer, reporting record one-day sales.

Online growth

Online shopping was 22% above normal on Friday, a survey by internet research firm Nielsen/Net Ratings said.

The survey found that Amazon.com was the most successful of the virtual department stores, with 1.7 million visitors during the day.

And Yahoo's online shopping service reported a 75% rise in sales during the post-Thanksgiving weekend.

Traditional retailers also enjoyed some website success.

Wal-Mart drew 355,000 unique visitors, while Target attracted 312,000 visitors and Kmart 227,000.

The rise in online shopping helped Wal-Mart shift $1.25bn of goods, a company record.

And the firm said shoppers continued to visit the chain in droves on Saturday.

Recovery hopes

The data caused US Treasury Secretary Paul O'Neill to proclaim that the American economy was heading for a recovery.

Mr O'Neill said there was now enough evidence to prove that the US economy had moved back to the recovery phase he believed was in place before the 11 September attacks.

Consumer spending is the engine of US economic growth and the spending habits of the American consumer have been largely credited for driving the economic boom of the past decade.

Any data showing that US consumers have not run out of steam was bound to be singled out by the authorities as a sign of an imminent turnaround in the economy.