Wal-Mart Stores Inc. extended its holiday price war into new territory Thursday by slashing online prices on 10 hotly anticipated DVDs, including the new Star Trek and Harry Potter releases, to $10.

Within hours, Amazon.com Inc. and Target Corp. matched some of Wal-Mart's online prices on pre-orders of the DVDs, and Wal-Mart lowered its price by a penny to $9.99, reprising the scuffle that broke out last month when Wal-Mart launched an aggressive $10 book promotion.

Wal-Mart Stores Inc. has limited its online customers to two copies each of certain bargain books. Amazon.com Inc. has a three-copy maximum on certain discounted titles and Target Corp. has a five-copy limit online.

The price war involves the top 10 hottest book pre-orders. Under the promotion, the three retailers are selling the yet-to-be-released titles, including books by Stephen King, John Grisham, Dean Koontz and James Patterson, at around $9 online, a substantial discount from their list prices of $22 to $35. Walmart.com, for example, is offering Mr. Koontz's thriller "Breathless" for $8.98, 68% off the cover price, while Target.com has it at $8.99 and Amazon charges $9.

The price wars come two months before the holiday season, which analysts say will be characterized by big promotions. Retailers are hoping consumers associate their brands with value in a year in which unemployment is rising and consumer confidence remains weak.

Last Thursday, Walmart.com, the online division of Wal-Mart Stores Inc (WMT.N), cut prices on 10 yet-to-be-released hardcover books to $10 each, sparking a price war with Amazon.com.

After both online retailers then cut their prices on those books to $9 each, late on Friday Walmart.com shaved a penny off that price and was selling titles such as Sarah Palin's "Going Rogue: An American Life" for $8.99 each -- discounts of nearly 60 percent or more off the cover price

"The $9 credit can be used at Sears.com on the purchase of any items so it's like getting the books for free," said Imran Jooma, senior vice president for Online at Sears Holdings. "We believe this program will benefit the thousands of customers who buy books every day by putting more money into their pockets."

Sears.com is simple and easy to use. The Web site offers the option to create a helpful profile that allows customers to keep track of their purchases, lists and addresses. Creating a profile makes returning to shop at Sears.com easy and worry free, particularly with the holidays right around the corner.

Wal-Mart triggered the online skirmish Thursday when it began selling its 10 most anticipated hardcovers for $10 apiece when pre-ordered on its Web site. Amazon matched the offer hours later and Wal-Mart then chopped its price to $9. Friday morning Amazon had matched the price.

"I'm worried about the major book-selling chains, and I'm concerned about the implications for publishers and the public alike," saidDavid Young, chief executive of Lagardere SCA's Hachette Book Group, one of the country's largest book publishers. He and other publishers said they feared the online pricing could hurt small independent book sellers and big retail chains.

A Walmart.com spokesman said Friday that the discount giant was prepared to make further cuts. The retailer's Web site will continue to adjust its prices, spokesman Ravi Jariwala said in an email, "so that Walmart.com offers the lowest online prices." Late Friday afternoon, it dropped its price a penny, to $8.99.

Walmart.com CEO Raul Vazquez said in an interview Thursday that the retailer "will go as low as we need to" to underscore Walmart.com's intent to be a low-price leader online. The retailer this month has sought to expand its Web presence, creating an Amazon-like online marketplace for other retailers and offering home delivery for purchases such as shampoo and diapers.

Amazon.com was able to lower the cost because of higher volume, said Drew Herdener, a company spokesman. "Whenever we are able to create cost efficiencies like this, we pass the savings along to our customers."

Chief Executive Officer Jeff Bezos aims to protect Amazon.com's leadership in electronic books, music and digital publications. The Seattle-based company is lowering the price as Plastic Logic Inc. and Hearst Corp.-backed FirstPaper develop competing products. While Amazon.com doesn’t disclose Kindle sales, the device has been a popular Christmas gift, selling out the past two holiday seasons.

"It's in Amazon's and every other manufacturers' interests to get these devices to a lower price point so more consumers can buy them," said Sarah Rotman Epps, an analyst at Forrester Research Inc. in Cambridge, Massachusetts. "The price of $359 was unsustainable, and it was just a matter of time before they dropped prices."