Valuations are finally back in line.
If the stock market's dive on Mar. 12 caught you by surprise, you weren't alone. Despite the swipes the bear is taking at the market on Wednesday, Mar. 14, lots of investor optimism is still propping up the stock market, many market watchers say. Only a few days after CEO Timothy Koogle dropped his daily oversight duties and announced that earnings were going to be way lower than expected, the stock is still trading at more than 140 times earnings. Valuation adjustments are still driving this market, more than problems with the economy or even corporate fundamentals. In fact, investor pessimism about valuations has spread from the tech sector to many of the Old Economy stocks in the Dow Jones industrial average.