J.C. Penney Denies Rumors of Accounting Irregularities

Just as Kmart (KM Quote) disclosed it is cooperating with authorities over alleged accounting irregularities, Wall Street is becoming jittery over the finances of department store chain J.C. Penney (JCP Quote).

After the close of trading Friday, J.C. Penney put out a statement saying it "has been made aware of a number of rumors circulating in the market." The company said the "rumors are unfounded and without merit" and that it was "unaware of any investigation or unannounced litigation."

The statement was in response to rumors that had circulated in financial circles this week over alleged Medicare fraud at the company's Eckerd drugstore chain. The rumors drove J.C. Penney's shares down more than 8% in trading Thursday and Friday. Shares closed the week at $23.70. ...