DETROIT (AP) Kmart Corp. remained silent Wednesday, refusing to release any information regarding its financial future even as its ratings and stocks took deeper blows.

Eric Beder, a senior vice president and retailing analyst for Ladenburg, Thalmann & Co. Inc., called Kmart”s silence “spooky.”

“Nothing scares investors more than a vacuum of information,” Beder said. “No one knows what”s going on except for the people in Troy, Michigan, and they”re not telling anyone else.”

Kmart”s board of directors held a regularly scheduled meeting on Monday and Tuesday, but the Troy-based retailer declined to discuss if any decisions had been made.

“The session ended Tuesday. There is nothing to report,” Kmart spokesman Jack Ferry said yesterday.

In release yesterday announcing ratings downgrades, Fitch Inc. said it appears increasingly likely that Kmart will choose to file for Chapter 11 bankruptcy, and in making the downgrades cited “continuing uncertainty as to Kmart”s current financial strategy in the absence of any communication from the company.”

“There”s a lot of word out there about it and that usually precedes it happening,” said Stuart Hirshfield, chairman of the bankruptcy division at Dewey Ballantine LLP, a New York-based law firm. “But it”s really hard to predict right now.”

Hirshfield said based on sales, Kmart would be the largest retailer ever to file for Chapter 11.

Beder said Kmart should be more concerned with reaching a new agreement with their banks to extend their revolving credit line and closing stores that have become a burden. He doesn”t think Kmart will file for bankruptcy.

“It would put its (Kmart”s) contracts with its vendors into chaos. They could lose vendors like Martha Stewart and Sesame Street,” Beder said. “You have to wonder what the point of Kmart would be without those kind of vendors.”

Martha Stewart Living Omnimedia has a provision in its contract that allows Stewart to exit Kmart in bankruptcy, but it would have to be interpreted by a bankruptcy judge.

Amid the speculation, Kmart”s stock tumbled to under $2 a share in trading yesterday. Yesterday afternoon, it was trading at $1.41.

Standard & Poor”s, one of the nation”s largest debt rating agencies, announced that Kmart will be taken off of its 500 index at the market”s close yesterday. Kmart will be replaced on the index by Plum Creek Timber.

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