The shares of J.C. Penney (JCP: sentiment, chart, options) arrived this morning at a multi-year low after Fitch Ratings revised its outlook to negative on the retailer's long-term issuer default rating of "BBB." The current rating is 2 notches above "junk" status, and the downwardly revised outlook suggests that a downgrade to this already-low opinion may be forthcoming.

The ratings firm said that it expects operating environments to remain challenging through 2009, with same-store sales and margins coming under fire from weak sales trends and heightened promotional activity. However, Fitch did note that JCP's liquidity remains strong, and its free cash flow could turn positive next year.

After dropping to $16.36, its lowest price since July 2003, JCP has rebounded and is roughly 1% higher in the first 90 minutes of trading. A wealth of pessimism already exists on the stock; during the past 10 days, the equity has racked up a put/call ratio of 4.49 on the International Securities Exchange. This reading ranks just 6 percentage points from an annual bearish peak.