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Upgrade gives Alloy Online much-needed boost

Alloy Online Inc. (Nasdaq: ALOY) shares jumped 2 1/16, or 21 percent, to 11 7/8 Monday after Volpe Brown Whelan & Co. upgraded the stock from a "buy" to a "strong buy" recommendation.

Alloy Online, a Web site that basically caters to the interests and tastes of the so-called Generation Y, has watched its stock steadily slip into an abyss following its May initial public offering.

The site explores content, apparel as well as music and magazines targeted for people between the age of 10 and 24 years.

In its first quarter, Alloy Online reported a smaller-than-expected loss of $2.3 million, or 26 cents a share, on sales of $2.5 million.

First Call consensus expects it to lose another 24 cents a share in its second quarter and $1.05 a share in the fiscal year.

After its lukewarm debut, Alloy Online shares marched up to an all-time high of 23 3/16 in July before slipping back to a low of 8 3/4 earlier this month.

In recent months, it's signed some marketing deals with the likes of Yahoo! Inc. (Nasdaq: YHOO) and Excite@Home Corp. (Nasdaq: ATHM).

Following Monday's upgrade, all three investment houses covering the stock maintain either a "buy" or "strong buy" recommendation.