J.C. Penney

(JCP) - Get Report

refuted rumors that sent its share price tumbling Wednesday, saying that Chief Executive Allen Questrom isn't about to step down and that the company hasn't changed performance expectations.

In a statement Wednesday, Questrom said the firm will "have to work harder given the current environment," but that its turnaround strategy is "on track."

"I am very pleased with the progress the company has made to date, and look forward to completing J.C. Penney's five-year turnaround strategies," he said.

The reassurances did little to bolster the firm's share price, which was last down almost 9% at $16.00. To be sure, the entire market was weak Wednesday, with other retailers also declining. The S&P Retail index was down 1.6% at 285. Also, J.C. Penney had jumped 17% from the close of trade last Wednesday through Tuesday, suggesting that some pullback was in order.

"

Questrom has been doing an excellent job and has a big financial stake in the company," said Bernard Sosnick, an analyst at Fahnestock & Co. "It

was unlikely that the company would make such an announcement so soon before Christmas."

But other analysts said rumors that the CEO might be ready to move on to something new weren't so outlandish. While J.C. Penney is still in a transitional mode, the firm has made great strides over the last two years. Indeed, since Questrom took over as CEO in Sept. 2000, Penney's stock has risen 43%. And despite some concerns over the summer about low inventories' crimping sales, the firm has met most of its financial targets.

"I think Mr. Questrom may be at a point in his career where he's more interested in turnaround and really challenging opportunities rather than maintenance," said Richard Hastings, vice president, chief economist and retail analyst at Cyber Business Credit.

"I think staying on at any company ultimately turns into a day-to-day maintenance job, and I don't think Questrom wants to do that," he said. "He's too creative."

Penney recently said it is comfortable with Wall Street expectations for third-quarter earnings of between 17 cents and 21 cents a share, and its own full-year guidance for earnings between 90 cents and $1 a share.

On Monday, the firm said October sales were tracking above its 3% to 4% estimates, with strength across all merchandise lines. Last month, same-store sales at department stores declined 3.1%, as demand for seasonal apparel waned, but other retailers also saw sales fall, while

Target

(TGT) - Get Report

,

Federated

and

Talbots

(TLB)

each lowered their earnings projections for the year.

Before Questrom's arrival, Penney had struggled with stiff competition from trendier firms such as

Old Navy

(GPS) - Get Report

as well as discount rivals such as Target. In his statement Wednesday, Questrom said the firm's merchants "have done a better job of being more on the mark as to what is going on with fashion."