Merrill Lynch ( MER) fired top retail analyst Peter Caruso Tuesday night because he violated the firm's research policy, according to a spokeswoman. Merrill said Caruso, who followed 20 stocks, violated the company's policy "regarding the disclosure of an earnings estimate change." Caruso had been ranked No. 1 among retail analysts by Institutional Investor for the past five years. Spokeswoman Melanie Begelman refused to comment on speculation that the analyst had been let go because he warned select clients about his imminent downgrade of Home Depot ( HD). Shares of Home Depot fell about 17% in the days before the downgrade. When Caruso cut his recommendation on July 12 to neutral from strong buy, the stock shed another 7.4%. Caruso raised a host of concerns at that time, from weaker sales trends compared with rival Lowe's ( LOW) to potential inventory problems that could weigh on the stock. Caruso couldn't be reached for comment, and his lawyer Julian Friedman didn't return calls.