NEW YORK — Kmart suppliers may be searching the store for sedatives by the time the discounter’s battle for survival is resolved.

As the stock hit its third 52-week low in as many trading days, another wave of jitters swept through the ranks of Kmart suppliers Monday, following Standard & Poor’s downgrade of Kmart’s credit ratings and reports that at least one major factor had stopped checking the discounter.

S&P said its ratings downgrade action was based on “heightened concerns about Kmart’s loss of financial flexibility in recent weeks.” It also said that a “recent loss of supplier and investor confidence is troubling.” S&P placed the ratings on CreditWatch with negative implications. Moody’s Investors Service, a competing ratings agency, on Friday also downgraded Kmart’s credit ratings.

In a related move Monday, Moody’s even placed the debt of Fleming Cos. Inc. under review for possible downgrade. Fleming has a $4.5 billion supply-chain arrangement in which it will provide substantially all of the food and consumable products in current and future Kmart stores. The food giant said Monday that its business relationship with Kmart remains strong. Because of the seven-day invoice and payment terms incorporated in the companies’ supply agreement, receivables from Kmart currently vary between $0 and $70 million, or less than 0.5 percent of Fleming’s annualized sales. The supermarket giant said Kmart is current in its payments to Fleming.

While Kmart remains the focus of credit anxiety, Moody’s on Monday also lowered the long- and short-term ratings of Gap Inc. to “Baa3” and “Prime-3,” respectively, due to the continuing decline in Gap’s financial performance. About $2.1 billion in debts were affected, and Moody’s said it was continuing its review for possible downgrade.

Contributing to the jitters of Kmart vendors are reports from financial circles that at least one major factoring firm, GMAC Commercial Credit, had stopped checking Kmart. Harold Dundish, executive vice president, declined comment.

Another credit source told WWD that all of the major factors are still checking Kmart for their large clients, but may be adding a surcharge for the service. Financial sources also told WWD that vendors are still getting approvals for replenishment orders, and that it may be too early for decisions on new orders, pending Kmart’s expected restructuring update this week.

Meanwhile, Kmart’s battered stock dropped to a 34-year low of $2.55 before closing at $2.84, down 46 cents, or 13.9 percent, in New York Stock Exchange trading.

Kmart denied reports of strains in the relationship with Martha Stewart Living Omnimedia Inc. Shares of Martha Stewart have been trending downward in sympathy with Kmart developments.

Still, vendors are proceeding with great caution as they await details of Kmart’s restructuring plans, expected later this week, and will be on edge for some time thereafter. Most equity analysts have ruled out a bankruptcy filing near term, as Kmart’s liquidity appears sufficient. Vendors, however, are concerned that more bad news such as store closures and below-plan sales trends — December same-store sales fell 1 percent — could snowball quickly into a Chapter 11 filing. Many predicted that a Kmart bankruptcy would be disastrous for the retail industry because of its impact up and down the supply chain.

A credit analyst said Friday he would be shocked if this week’s announcement includes a Chapter 11. He explained that the current bank facility is unsecured, but didn’t rule out a later filing after the new facility is put in place. As reported, the financing deal that Kmart expects to close next month, with J.P. Morgan as the lead bank, is expected to be secured by inventory and possibly some real estate. Banks whose loans are secured by collateral are high up on the totem pole and don’t have to worry about an unsecured claim remaining unpaid.

Andrew Postal, a managing director at consulting firm MMG, said private label suppliers are faced with a vexing dilemma — turn down business or sell with a risk. “It’s a terrible bind when you produce goods that are house brands for a large retailer,” he said. “You can’t sell anywhere else unless you change the labels.”

A credit manager said: “Kmart stores are basically in disarray. Payments have been consistently past due, with the retailer blaming that on computerization.”

Another vendor, one which provides trim for apparel, is concerned that Kmart store closures would mean a cut back on orders from his customers that make private label apparel for the troubled chain.

One self-financing apparel vendor said Friday that the company moved quickly early this year to purchase credit insurance to protect itself in case Kmart becomes unable to pay its bills. A source at another major apparel vendor said: “Some invoices have been paid, but there are others that still are outstanding.” Company executives, who have been unsuccessful in getting information from Kmart, are planning to visit the chain’s Troy, Mich., headquarters next week. The source said they’re hoping to meet someone who can provide enough information to help them establish some comfort zone in determining which orders to accept and how much to ship.

Many who are closely watching the Kmart developments are mixed in their views about the discounter’s chances for success.

Adam Winters, senior vice president at Merchant Factors Corp., said: “Kmart has a very difficult time competing with Wal-Mart and Target. I don’t know how it is going to reinvent itself on that level.”

According to Richard D. Hastings, credit economist at Cyber Business Credit, Kmart shouldn’t even make the attempt. “It is a perilous environment for toe-to-toe competition. When Kmart drops prices on items, it is trying to get foot traffic back from Wal-Mart and patron loyalty based on price. Kmart is looking outside of itself for growth instead of focusing on the inside for an efficient business model. There is no growth out there and it is a zero-sum situation.” The economist observed that Kmart first needs to figure out how large it wants to be, then zero in on how to get efficiencies and work within the capitalization structure.

Kmart was founded in 1899 as a five-and-dime in Detroit under the trade name S.S. Kresge Co. Many of its cheap variety store competitors are now defunct. S.S. Kresge, however, grew up and in the late Seventies, changed its name to what was then its most successful division, Kmart.