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By Robert Holmes, TheStreet

 

Investors have been told by analysts that the stock market rout is creating attractive values. But JPMorgan (JPM) U.S. equity strategist Thomas Lee, one of the most bullish analysts on Wall Street, says stocks aren't quite there yet.

 

Lee, in a research note today, says 53% of stocks have a price-to-earnings ratio, one of the key metrics of valuation, of less than 12 times forward earnings. By comparison, during market low in March 2009, 67% of stocks were that cheap.

 

"Investors have pointed to their reluctance to look at P/E valuations given concerns on earnings visibility," Lee writes in Friday's report, referring to skepticism over the accuracy of analysts' forecasts for corporate earnings. "But valuations ultimately mark lows -- stocks get cheap enough that buyers are enticed."

 

Facebook's recent changes are driving some users crazy. They hate the new look, and they're letting Facebook know about it.

"This new Facebook is so freakin' aggravating!!!!!!!" complained one user. Another chimed in with this: "What a screw-up! It was working fine before the Facebook folks 'improved it.' I will no doubt use it LESS."

Get ready, folks. More changes are coming. 

By Ted Reed, TheStreet

 

Global fears are taking their toll on many stocks that deserve better, among them those of the world's largest automobile manufacturer.

 

On Friday, GM (GM) shares fell below $20 for the first time, hitting $19.77 before rebounding to $20.96, up 3.5% in the early afternoon. The shares began trading in November after an initial public offering at $35 and began 2011 at $37.32. For the full year, GM shares are down 44%, while Ford (F) shares are down 42%.

 

Many analysts, including Efraim Levy of S&P Capital IQ, have long believed investors are not seeing GM's value.

 

"We think that GM is very undervalued," Levy said in an interview. "The market is overly pessimistic about future demand for vehicles."

 

By Tom Aspray, MoneyShow.com

The over 5% decline in the Dow Industrials in the past two days has turned investors’ focus back on the downside, which is different from the positive spin that prevailed just a week ago.

From a technical standpoint, I have been making the case that the rebound from the August lows was a typical flag formation. The Nasdaq Composite has been the strongest since the August lows, but the negative signals from the McClellan Oscillator as of Tuesday’s close indicated even the Nasdaq had likely topped out.

Those who sold at the August 9 lows have had almost two months to watch the market stage a typical 50% rebound. If anyone sold yesterday because stops were hit or as a result of a previously developed plan, that is fine, but Thursday’s drop suggested many were just hitting the sell button in a panic reaction.

The bearish sentiment of individual investors jumped sharply this week, as 48% are now bearish with just 25% bullish. These numbers are as of Wednesday, so they should become more bearish by next week.

Gold was also hit hard Thursday and could be vulnerable to more panic selling before the current correction is over. By looking at the charts, we can get a better idea of what may occur so that you can develop a plan based on data, not emotion.

 

By Jeff Reeves, InvestorPlace.com

Back in 2006, Apple (AAPL) was riding high on the success of its iPod. The gadget accounted for more than 50% of first-quarter revenue that year as a digital music revolution was in full swing.

Now the iconic iPod is an afterthought, bringing in a mere 8% of Apple revenue -- and falling fast as other gadgets take over the digital jukebox role on top of many other functions.

So could Apple pull a page out of the Netflix (NFLX) handbook and voluntarily kill off a dying segment of its business? Would it make sense for Apple to refocus rather than just run the iPod into the ground?

 

Does it do any good to say that the world is on the eve of another financial crisis, as I hear so many people saying? Does it do any good to catcall me for saying that Treasury Secretary Tim Geithner was just being upbeat and hopeful when he said there will be no more Lehmans?

 

No and yes. No, it does not do any good to proclaim we are on the eve of the next financial crisis, because it's the degree of crisis that matters. People seem to forget that the center almost didn't hold during 2008. It was only the destruction of trillions of dollars of capital that allowed us to bottom, with a tremendous number of financial institutions in this country being wiped off the face of the earth, including many that had been with us for some time, including Bear Stearns, Lehman Bros., Merrill Lynch, Fannie Mae, Freddie Mac and three reconstituted and quasi-nationalized companies -- General Motors (GM), American International Group (AIG) and Citigroup (C).

 

Are we going to get that kind of crisis? That's where the second point comes in, Geithner's point. There is a grave misconception about what Geithner told me last week and what I am reading, say, in the mocking Twittersphere.

 

 

Stocks and other risky assets dropped early and hard Thursday morning as a flood of sell-at-open trades knocked the major averages down. The fear, if I understand the bears' reasoning correctly, is that while the Federal Reserve announced a new $400 billion Operation Twist stimulus plan Wednesday, it was accompanied by a statement that there were "significant" downside risks to the economy. Not to sound trite, but duh!

 

We already knew this. There were indications of trouble as far back as mid-April as inflationary pressures raged. By now, the breakdown in consumer and business confidence and a slowdown in the labor market are well known. The fact that the central bank is acknowledging this -- and responding with new stimulus -- should be considered positive.

 

And there are plenty of other reasons that now is not the time for panic.

 

Shares of Hewlett-Packard (HPQ) spiked 10% Wednesday on news that the company may name Meg Whitman as its next chief executive. The stock was down 4% Thursday, however, and an announcement is expected after the market closes.

Are investors happy that Whitman is coming in or that HP is finally getting rid of CEO Leo Apotheker? Probably yes to both. 

Netflix (NFLX) has taken an incredible beating recently -- see the chart here -- with shares plunging nearly 45% since the first of the month to approach a 52-week low.

It's an amazing drop for the one-time market darling. And many observers are shaking their heads in disbelief, since this company normally executes flawlessly. Now its executives look like boneheads.

What happened to Netflix? 

By Tom Aspray, MoneyShow.com

The late-in-session drop in the stock market after the Fed announcement was consistent with the deterioration in the technical outlook discussed yesterday. The McClellan Oscillator has broken below support, which makes a further drop very likely.

Three of the major sectors look most vulnerable to further selling and they are likely to underperform the S&P 500. Even though technology was also lower, it continues to show better relative performance, or RS analysis, which suggests the tech sector will hold above the August lows.

For the Select Sector SPDR - Energy (XLE), it is important to keep an eye on crude oil prices. As I have frequently pointed out, crude oil often leads the stock market on both the up and down side. November crude oil was down over $2 yesterday, and a break of key support would be a negative for the energy sector and stocks in general.

 

By Dan Freed, TheStreet

 

Wells Fargo (WFC), JPMorgan Chase (JPM), SunTrust Banks (STI) and City National Corp. (CYN) are the banks best positioned for a flatter U.S. Treasury yield curve now that the Federal Reserve has flattened it in a move dubbed Operation Twist, according to a research report published Wednesday by Evercore Partners.

 

There had been widespread speculation that the Fed would perform Operation Twist -- which aims to raise short-term interest rates while pushing down long-term rates -- before the Fed officially announced the plan Wednesday. The hope is that the move will attract foreign capital while keeping financing costs low, the Evercore report stated before the Fed made the move official.

 

Overall, Operation Twist would be bad for banks in the long term because it would negatively affect net interest margins, which represent the difference between banks' cost of capital and what they can charge borrowers.

 

Did anyone get the license plate of that truck? I think it was a vanity plate. I think it had the word "significant" on it. Because that's the word that the Fed inserted before the term "downside risk," a word that didn't exist in the Aug. 9 statement that jumped at you this time around.

 

So we get one of those old-time sell-offs, one that takes down not only the companies that do poorly when there is significant risk -- you know, the usual suspects they shoot every day when things are said to be bad, such as rails, chemicals, papers, minerals -- but also the "recession-rich" stocks -- new term -- the ones that make you rich if there is a recession.

 

Yep, it was an S&P 500 ($INX) jailbreak. Everyone is, indeed, selling everything. Didn't we see this before? Except then we were in better shape to handle it.

 

By Jeff Reeves, InvestorPlace.com

Can former eBay CEO Meg Whitman fix Hewlett-Packard?

 

HP's board named Whitman their new chief this afternoon, after two days of reports the move was imminent.

 

Hewlett-Packard (HPQ) shares soared as much as 10% Wednesday on rumors that the tech giant's board could be kicking chief executive Leo Apotheker to the curb, with Whitman waiting in the wings. Shares fell almost 5% on Thursday, a little worse than the market overall.

 

But don't be fooled -- this is just the latest dumb move at Hewlett-Packard, a company plagued not just by a revolving door in the corner office but by a glue-and-sticky-tape​ approach to its current ugly state of affairs.