Bank of America Destroys Oil Stocks

• Bank of America’s Merrill Lynch downgraded a bundle of oil/energy stocks due to the highly volatile oil prices
• The firm downgraded 6 stocks, 5 of which had a drastic price target drop
• The firm notes an extended commodity weakness as a major reason for the downgrades

The Dow Jones Industrial Index sank more than 1,000 points on Monday’s morning session causes by China’s volatile Shanghai index, which tumbled 8.5 percent on Monday. Crude oil also played a major role as dropped 5 percent to the $38 level.

Worries about China’s growth and its currency are scaring investors into a sell off; commodities continue to get hit hard as oil dropped to prices experienced back in March of 2009.

Bank of America, on Monday, revised their ratings on some major oil players; Bank of America downgraded Continental Resources Inc CLR from its Buy rating down to Neutral rating, lowering its price target from $70 down to $44. The firm also downgraded Marathon Petroleum Corporation MPC from Neutral to Underperform rating and also lowered its price target from $64 down to $56.

Marathon Oil Corporation MRO was also downgraded from a Buy rating down to a Neutral rating, its price target lowered from $36 to $20. Noble Energy NBL was also downgraded from a Buy rating to a Neutral rating and lowered its price target from $65 to $44.

Valero Energy Corporation VLO was brought down by Bank of America from a Neutral rating down to an Underperform rating, but the firm raised its price target from $64 to $68. Finally, the firm downgraded Whiting Petroleum Corp WLL from a Buy rating down to a Neutral rating with its price target lowered from $38 down to $27.