Good point you raised on NE's current valuation. But the oil that leaks naturally doesn't show up on CNN etc. If the oil begins showing up and ruining Florida's panhandle beaches, even NE will get taken down more. I own some NE and would like to buy more at this level, but won't. Hopefully I will have missed a great buying opportunity, which will likely mean the spill has been stopped. I will gladly take that trade-off.
The coverage has no doubt caused some investors to put off buying, others to sell, and some to short. All of this is already done, but I would guess that the shorts are only starting to cover, and those sitting on the sidelines are deciding when to jump in. There is more to that though. What this situation has done is made this sector a very good deal in a very public way. This stock could rise as fast or faster than it fell.