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Ticker Shock: Wal-Mart Cuts Prices, Starbucks May Be Forced To Do Same


Wednesday's top stories and stocks with potential to move.


Well, we've hit the hump and we're still waiting for a deal. The good news is, it looks like our elected officials are (actually) doing something. The House Republicans are reportedly looking into an alternative plan, while the Senate is supposedly set to vote on its version of the bill. The scuttlebutt is that that version will raise the cap on deposit insurance to $250,000 from $100,000.

At present, however, both the Dow and S&P are in the red. Here's the skinny today:

Walmart (WMT) Minyanville's Why Wall Street Will Never Be the Same
In the wee hours of the morning, the 800-pound gorilla of discount retail said it's cutting prices on a number of big-name toys. Among them: Barbie dolls, some Hot Wheels stuff and other well-known items your kids may be asking you for this holiday season.

This is good for the consumer, and extending the holiday could be good news for Wal-Mart if the move generates enough foot traffic to overcome these price cuts. And I suspect it will.

Of course, this will likely put pressure on other big-name retailers to enact cuts of their own, which could lead to some margin pressure and even weak fourth-quarter earnings.

Las Vegas Sands (LVS)
The Las Vegas-based casino disseminated a press release late last night. It said: "Sheldon G. Adelson, chairman, chief executive officer and principal stockholder, and his family, have completed an investment in the company of $475 million in convertible senior notes in a private transaction."

The interest on the notes is 6.5% and are convertible at $49.65.

I've been pretty bearish about the outlook for Vegas gambling - it costs money to travel to the desert and folks aren't exactly spending big bucks these days. I've also questioned the near-term outlook for Macau due to stiff competition. But regardless of how you slice it, this is a pretty big vote of confidence.

Does this mean I'd follow the gentleman's lead and buy the stock? Not quite. Not yet. I sense that Adelson's investment horizon is pretty long. I'm also concerned that tax-loss selling could drive shares down further (they're trading near their 52-week low). But it does put the stock a little higher on my radar screen.

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No positions in stocks mentioned.

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