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Thursday, July 13, 2006

Most Widely Traded 48 Hour Clock: Wal-Mart Down

Stock Tickers: WMT, HD, TGT, SHLD

24/7 Wall St. has begun coverage of the 36 most widely traded stocks, eighteen each from the NYSE and the NASDAQ. Most of these stocks trade over 50 million shares a week. This new feature will highlight each of the 36 stocks at least every 48 hours giving investors fresh infomation and perspective on the companies whose shares are most likely to move the broader markets.

Wal-Mart has been the big pig in the DJIA this morning as shares in the retailing behemoth are down 2% in pre-market trading. The drop is from a research call out of Merrill Lynch, where they cut the rating from a Buy down to a Neutral. The earnings cuts were more alarming than the downgrade coming when the shares have already been weak and were already in the lower 1/3 of the 52-week trading band. These cuts were from $2.89 down to $2.87 for 2006, but the big blow was the trimming of 2007 EPS estimates from $3.37 down all the way to $3.14. So 2007 EPS was trimmed by 6.6%; and that translates to predicted EPS growth being 9.4% instead of Merrill Lynch's prior expectation of 13.1%. The downgrade sites consumer problems also contributing to its ability to sustain top-line core growth.

There has been very little trading in related names, so this may be isolated to the behemoth for now. Home Depot (HD) was hardly changed; Sears holdings (SHLD) is down 0.4% at $147.69 pre-market; Target (TGT) is indicated down 0.4%.

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