Merrill Lynch

analyst

Henry Blodget Monday cut earnings estimates on online bookseller

Amazon

(AMZN) - Get Report

, pushing its stock down 1.3% amid a mild tech selloff.

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"We believe the company is going through an awkward transition from a hyper-growth, revenue momentum story to a long-term growth and earnings story," Blodget wrote. He widened his third-quarter loss estimate to 32 cents a share from 30 cents, and expanded his 2000 loss estimate to $1.27 a share from $1.23. Blodget also adjusted his 2001 loss estimate, expanding it to 63 cents a share from 53 cents.

Despite the estimate change, Blodget kept his intermediate-term accumulate and long term buy ratings on the stock, noting that he believes investment sentiment toward online retailers has lately been improving.

Blodget, who made a name for himself with an audacious -- and correct -- price target of $400 on Amazon back in 1998, cut his intermediate-term rating on the bookseller to accumulate from buy on

July 27.

Amazon dropped 56 cents to close at $42.38.

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