Enron Corp. Wednesday said it was suspending all payments except those “necessary to maintain core operations” in the wake of Dynegy Inc.’s termination of their merger agreement and the downgrading of Enron’s credit rating to junk bond status.

The company also said it is exploring “other” unnamed options. The only plausible option is the “obvious route to Chapter 11,” said John Olson, analyst with Sanders Morris Mundy. “It’s a sad ending to a meteoric 10 years.”

The stock was trading at about 68¢/share at midafternoon after a halt of several hours by the New York Stock Exchange. Officials were waiting for dissemination of the news about the deal breaking up and then were clearing up an imbalance of buy and sell orders, a NYSE spokesman said. More than 305.5 million shares traded by the close, a new trading volume record for a single stock on the NYSE.

“We are evaluating and exploring other options to protect our core energy business,” said Kenneth Lay, CEO of Enron. “We will work to retain the employees necessary to the continuing operations of our trading and other core energy businesses.”

Enron also said it is “reviewing Dynegy’s actions today including its assertion that it is entitled to exercise an option to purchase Enron’s interest in the Northern Natural Gas Co.” Observers said the fate of Enron’s pipeline, which generated consistent cash flow for Enron, will be disputed in court.

“The banks will scream that Dynegy’s claim on the pipeline was obtained in a fraudulent transaction in anticipation of bankruptcy,” one analyst said.

Problems leading up to the melt down of the share price over the last few weeks resulted from credibility and liquidity issues following a series of financial disclosures by Enron that spooked investors. The company wrote down $500 million in earnings over 4 years and revealed billions in debt incurred by off balance sheet partnerships that were linked to company equity. The US Securities and Exchange Commission is investigating. The company has said it is cooperating.