NEW YORK (AP) -- Barnes & Noble Inc. said Tuesday it narrowed its net loss in its fiscal first quarter as sales of its Nook e-book reader and e-books helped offset lower physical book sales.The company also sounded a positive note about the holidays, saying that traffic will benefit from the fact that its chief rival, Borders Group, will be shuttered by then. Barnes & Noble shares rose nearly 15 percent, or $1.70, to close at $13.13."Investors are just feeling assured that Barnes & Noble isn't following Borders' downward spiral and the money they're spending on the Nook ... it's paying off," said Simba Information senior trade analyst Michael Norris.Traditional booksellers like Barnes & Noble are facing tough competition from online retailers and discount stores. But the company has invested heavily in its e-book reader to combat this, a strategy that seems to be gaining traction."In fiscal 2012, we expect to see leverage as our digital sales growth is projected to exceed the growth of investment spend," said CEO William Lynch.Barnes & Noble, which received a $204 million investment from former suitor Liberty Media earlier this month, said its Nook business, including Nooks themselves, e-books and magazines and other digital content and accessories, rose 140 percent to $227 million during the quarter.The largest U.S. traditional book retailer says its net loss was $56.6 million, or 99 cents per share. That compares with a loss of $62.5 million, or $1.12 per share, last year. Analysts expected a loss of 94 cents per share.Revenue rose nearly 2 percent to $1.42 billion from $1.4 billion. Analysts expected $1.46 billion in revenue.Revenue in stores open at least one year ---- a key indicator of a retailer's health ---- fell 1.6 percent at regular stores and 1.8 percent at college bookstores. But revenue from the web site rose 37 percent, driven by sales of Barnes & Noble's Nook Color and Nook Simple Touch Reader, as well as digital content.Barnes & Noble says it expects to get a lift in sales of $150 million to $200 million after former rival Borders, which declared bankruptcy in February and said it would liquidate in July, completes liquidation sales and ends operations."We're convinced this holiday will be the biggest traffic we've had in the stores over five years," Lynch said in a call with analysts.In fiscal 2012, the company expects a net loss of 10 cents to 50 cents per share on revenue of $7.4 billion. Analysts expect a net loss of 16 cents per share on revenue of $7.43 billion.The New York company expects revenue from its Nook business to double in 2012, to $1.8 billion from $880 million.