S&P downgrades Sears

Standard & Poor's said it lowered the corporate credit rating to B+ from BB- on Sears Holdings Corp. and its subsidiaries.

The outlook is negative.

The agency also said it affirmed the B-2 short-term rating on subsidiary Sears Roebuck Acceptance Corp., given its strong liquidity.

The ratings reflect expectations that sales will remain under pressure due to intense competition, S&P said, and weak consumer demand in the fragile economic recovery for high-ticket items such as appliances.

Negative sales trends, combined with expected cost pressure, should result in lower-than-expected earnings in 2011 and further deterioration in credit measures, the agency said.

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