The shares of struggling retailer Liz Claiborne, Inc. (LIZ: sentiment, chart, options) are taking a hit today after the company announced last night it will suspend its quarterly cash dividend indefinitely. The suspension of the firm's 5.625-cent payout is expected to save roughly $21 million per year.

"While there is much going on in the economy that we have no control over, we are keenly focused on controlling those things that are within our power -- inventories, accounts receivable, brand and strategy execution and generating free cash flow," said Chief Executive Bill McComb.

As we approach midday, LIZ is down nearly 5% at $2.88. Last night's announcement may have come as a shock to option players, who have recently exhibited a bullish bias toward the retailer. LIZ currently sports a 10-day call/put ratio of 2.90 on the International Securities Exchange (ISE), with call volume nearly tripling that of puts. This ratio is hovering just 13 percentage points from an annual peak of optimism.