Shares of Limited Brands (LTD: sentiment, chart, options) are battling for breakeven this afternoon, after Standard & Poor's cut the company to junk status. Late on Friday, S&P cut LTD's long-term corporate credit rating to BB+ from BBB- because of the weak economy. S&P also lowered Limited's short-term rating to B-1 from A-3. The outlook is stable. "The downgrade reflects our belief that the company will be more challenged than previously expected by the current weak economic environment in the U.S., and this will impede its ability to improve credit metrics over the near term," the ratings firm said in a statement.

Technically, LTD remains trapped below resistance at its descending 10-week moving average. The shares have not closed a week above this trendline since mid-September. Furthermore, this moving average has descended into the 10 area, a technical hurdle that has stymied LTD since mid-November.

Despite the decline, options traders are optimistic. LTD's Schaeffer's put/call open interest ratio (SOIR) of 0.94 ranks below 62% of all those taken during the past year. But options traders are in the minority, as 7 of the 8 analysts following the shares rate them a "hold," while nearly 6% of the stock's float is sold short. Should speculative options traders begin to drift toward the bears' camp, we could see additional selling pressure levied against LTD.