eBay Slumps 5% on Comments

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eBay

(EBAY) - Get Report

was down 5% in preopen

Island

and other Internet issues were also lower. After Tuesday's close,

Merrill Lynch

analyst Henry Blodget said even the top companies in the sector could face short-term difficulties.

Blodget also cited

AOL

(AOL)

,

Amazon.com

(AMZN) - Get Report

and

Yahoo!

(YHOO)

, saying that Yahoo! in particular is risky in the near-term because of the deteriorating online advertising market.

Yahoo! was down 4.1% in the preopen. Amazon.com was down 4.1%. Blodget said eBay's business is OK but that the stock is expensive.