Memo to Floyd Hall: Keep quiet. Kmart's chairman met with investors in October, trying to dispel concerns the discounter is a candidate for Chapter 11. Hall bragged of the "massive change and progress" Kmart made in closing stores, selling assets, and cutting costs. The more he talked, though, the more Wall Street obsessed about the bankruptcy. "Speculation about Chapter 11 tends to feed on itself," says Prudential Securities analyst Wayne Hood. By Nov. 1, Kmart shares fell to $8.50, a 13-year low.

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