SAN FRANCISCO -- The good news about today's session is there will now be a moratorium, for a few days at least, on the "


10,000" hype revival. The bad news, for those long, is that the negatives continue to mount, and the stock market proved unable to ignore them for a second-straight session.

The Dow Jones Industrial Average fell 1.6%, or 161 points, to 9711.86, while the

S&P 500

shed 1.8% and the

Nasdaq Composite

slid 2.5%. The Dow lost 110 points on Tuesday.

At the micro level, the big news today was the collapse of the merger talks between






after major rating agencies cut Enron's debt to junk status. Dynegy slid 12% while Enron fell 85% to 61 cents on the heaviest ever trading day for an individual stock in

New York Stock Exchange


The bigger impact for market proxies was

the fallout for lenders with close ties to Enron.


(C) - Get Report

fell 5.4%,

J.P. Morgan

(JPM) - Get Report

lost 5.8%, and

General Electric

(GE) - Get Report

, whose financing unit has exposure to Enron, shed 4.2%.

Brokerage firms such as

Merrill Lynch



Lehman Brothers


also fell on the news. The Philadelphia Stock Exchange/KBW bank index slid 3.1%, and the American Stock Exchange brokerage index fell 4.8%.



(GPS) - Get Report

fell 5.5% after being downgraded to sell by Prudential Securities.

On the macro level, the

Federal Reserve

released its

beige book survey of economic activity in the 12 regions of the Fed banking system.

The beige book declared that overall U.S. "economic activity generally remained soft in October and the first half of November," which probably isn't surprising. But the report's finding that "additional slowing in most regions

was outweighing signs of recovery in a few districts" proved disconcerting to those betting on the economic recovery scenario.

The message from the beige book and yesterday's comments from Fed governors have rekindled expectations for another rate cut by the Fed at its Dec. 11 meeting; the odds of a 25 basis-point cut have doubled this week to more than 60%, according to the fed fund futures.

Nevertheless, the Treasury bond market failed to make any headway; the price of the benchmark 10-year note fell 6/32, to 100 14/32, its yield rising to 4.94%.

Best Ideas, Continued

Picking up where we left off

last night, today's market action be damned, Aaron Edelheit of Sabre Value Management, whose managed accounts are up more than 20% after fees year to date, offered the following "best ideas."

First, he recommends

Shamrock Logistics


, which was spun out of

Ultramar Diamond Shamrock


in April.

Like most bulls on the stock, Edelheit believes


(VLO) - Get Report

acquisition of Ultramar will provide Shamrock Logistics with more opportunities to transport and store refined crude oil products.

Additionally, he likes the company's 6.6% dividend yield and its low debt-to-equity level, currently just 0.09 vs. the industry average of 1.12, according to Media General Financial Services.

Still, UBS Warburg, which has done underwriting for Shamrock Logistics, recently lowered its recommendation to buy from strong buy, citing valuation concerns after the stock's nearly 50% gain since its IPO on April 10.

Second, Edelheit recommends

Flowers Foods

(FLO) - Get Report

, which he dubbed "a neat little turnaround story."

The wholesale bakery firm was spun off this year when Flowers Industries sold its interest in

Keebler Foods




(K) - Get Report


Although the stock has nearly doubled since its debut on March 23, Edelheit argued it is "still cheap." The company is trading about 6.5 times its enterprise value based on his estimate of about $6 per share in earnings before interest, taxes, depreciation and amortization for next year.

Also, he noted that the company should generate about $250 million in free cash flow in the next three to four years.

Though baked goods aren't likely to get most investors salivating (save for

Krispy Kreme


), I'll also point out they are a good play on the so-called "nesting" trend.

Note: Flowers Industries announced a 3-for-2 stock split on Nov. 16 that takes effect on Jan. 2. The split is payable to shareholders of record on Dec. 14, but the firm's shares outstanding will increase from about 19.9 million to 29.8 million so there's a dilution issue to consider.

Additionally, the firm's general counsel and board member G. Anthony Campbell resigned on Nov. 19. The firm said he left to pursue other business interests, but the departure of a high-ranking executive less than a year after the company was spun-off might be a red flag for would-be buyers.

Speaking of red flags, faithful readers of

Herb Greenberg's column will recall that Edelheit is one of the more outspoken shorts on

Harley Davidson



The fund manager offered two other short ideas,

Estee Lauder

(EL) - Get Report


Household International

(HI) - Get Report


Estee Lauder's rising inventory -- at over 200 days -- is contributing to a deteriorating cash flow situation, Edelheit contended, noting that the company burned more than $100 million in cash flow from operations last quarter.

Indeed, last month the Center for Financial Research and Analysis cited rising inventories, declining cash flow and declining operating margins in the firm's fiscal fourth quarter among its concerns about Estee Lauder.

However, Estee Lauder has long proved tricky for shorts, and these concerns are "not new news," according to Goldman Sachs, which recommends purchase of the stock "because valuation is very attractive." Goldman has done underwriting for Estee Lauder and has the stock on its recommended list.

Household International, meanwhile, benefited from lower interest rates, but Edelheit believes they will be "squeezed" as rates rise. Additionally, he believes the firm is using "balance sheet machinations" to enhance earnings.

On the other hand,'s

InsiderInsight column recently declared that Household International's insiders "are telling us it's buying time once more."

Once more, these contrasting views demonstrate why recommendations made in this column should be used as a starting-off point for your own research, not as the end of your decision-making process.