Resist the Bluelight Special on Kmart Stock

Discount chain Kmart's (KM Quote) turnaround hopes are fading, and investors are rightly shedding the stock.

Shares are off more than 55% from their 52-week high of $13.55 reached in early August, as investors have come to realize that any turnaround at this outfit will take longer than anticipated. This week the company reported earnings -- a loss, actually, in this case -- that beat Wall Street estimates, but don't be fooled: the company's 25 cents-a-share loss was less than the 27- cent consensus, but as recently as seven weeks ago analysts expected the company to lose only a dime a share, according to I/B/E/S. ...