AECOM Technology Corporation (NYSE: ACM) Cut to Underperform at BofA/ML.

Alnylam Pharmaceuticals, Inc. (NASDAQ: ALNY) Started as Overweight at JPMorgan.

Biogen Idec Inc. (NASDAQ: BIIB) Reiterated Buy with $145 target at Argus.

BP plc (NYSE: BP) Cut to Underweight at Barclays.

Capital One Financial Corp. (NYSE: COF) Raised to Hold from Sell at Argus.

China Petroleum & Chemical (NYSE: SNP), or Sinopec, named Bear of the Day at Zacks.

Cognizant Technology Solutions (NASDAQ: CTSH) Raised to Outperform at R.W. Baird.

Electronic Arts Inc. (NASDAQ: EA) Raised to Buy at Needham.

El Paso Pipeline Partners, LP (NYSE: EPB) Started as Outperform with $38 target at Credit Suisse.

Embraer SA (NYSE: ERJ) Cut to Neutral at Citigroup.

Ford Motor Co. (NYSE: F) maintained Buy with $19 target at Argus.

Louisiana-Pacific Corporation (NYSE: LPX) Raised to Buy at Deutsche Bank.

Manulife Financial (NYSE: MFC) named Bull of the Day at Zacks.

Millennial Media Inc. (NYSE: MM) Started as Neutral at Goldman Sachs; Started as Equal-weight at Morgan Stanley; Started as Equal-weight at Barclays.

Rackspace Hosting, Inc. (NYSE: RAX) maintained Neutral with $57 target at Goldman Sachs.

Synacor Inc. (NASDAQ: SYNC) Cut to Underperform at BofA/ML.

Vertex Pharmaceuticals (NASDAQ: VRTX) Raised to Equal-weight at Morgan Stanley.

Wynn Resorts Ltd. (NASDAQ: WYNN) Maintained Outperform with $166 target at Credit Suisse.

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JON C. OGG

According to reports in the Financial Times, Repsol wanted more than $10 billion for its stake in YPF and had hoped to get a deal agreed before going to Argentina’s President Cristina Kirchner. But she beat Repsol and Sinopec to the punch with yesterday’s announcement that the government would re-nationalize YPF.

Sinopec, of course, now has no intention of buying Repsol’s stake in YPF and the government of Argentina appears to have no intention of paying Repsol $10 billion or more for the Spanish company’s stake. Repsol shareholders can only lament the one that got away.

Paul Ausick

The company’s CEO, formerly the head of Cnooc Ltd. (NYSE: CEO), said that Sinopec would try to balance its dominant position as a refiner — it’s China’s largest refiner — by adding more upstream assets in foreign countries. Sinopec also wants to explore for more hydrocarbons in western China and to speed up development of domestic shale gas fields. The catch is that the country produces no shale gas at the moment.

Sinopec Group, parent of Sinopec, has purchased some $48.1 billion worth of foreign assets since 2008 according to Reuters. The parent is expected to contribute some foreign assets to Sinopec Corp. over the next few years, assets that are expected to improve the company’s profitability.

Recon was threatened with de-listing by Nasdaq late last year for failing to file an annual report. The company was also warned for failing to be in compliance with Nasdaq’s minimum market cap requirement. The company corrected both issues in February.

Recon’s shares have gained 80% today to $4.05 in a 52-week range of $0.27-$4.50. Shares posted an intra-day high of $4.35 earlier this morning.

China’s drivers and businesses are about to go through the second increase in gas and diesel prices in six weeks. The central government has pushed up the price of gas 6.4% as part of the most recent change. Diesel prices were raised 7%. The primary reason for the changes, outsiders speculate, is that China’s huge oil companies — China Petroleum & Chemical (NYSE: SNP) and PetroChina (NYSE: PTR) — both partially owned by the state, have posted billions of dollars in losses as they act their parts in a system that keeps gas prices low despite the huge increase in crude costs over the past three months.

As fuel prices threaten the world’s economy, it hardly matters why gas, petrochemical and diesel prices rise. All economies are trapped by the rise in crude. There is nothing in the supply and demand system to offset this. Political problems in Iran will not go away any time soon.

Several refineries in the U.S. cannot make money any more because they cannot pass the cost of crude onto the market. That means some, particularly on the East Coast, will close. That will have the likely effect of making gas prices even higher. In China, the government will keep refineries open. The government can pay for them to stay open. But now its wants better margins to do so, and it can force that case.

China may be the last large nation in which inexpensive gas prices help continue to fuel improvement in gross domestic product. If that process ends swiftly, the price of energy will join an overall slowdown in factory activity and real estate value deflation in the People’s Republic to sharply undercut economic expansion. China quickly will become more like the rest of the world, at least economically.

Douglas A. McIntyre

The Obama Administration is expected to help U.S. solar panel makers in a trade war with China. (Reuters)

The S&P 500 is within 10% of its record high. (Reuters)

Amazon.com (NASDAQ: AMZN) will buy Kiva Systems for $775 million. (Reuters)

A study by Appcelerator shows app developers moving more effort to Apple (NASDAQ: AAPL) and away from Google’s (NASDAQ: GOOG) Android and Research In Motion (NASDAQ: RIMM). (Reuters)

Facebook’s underwriters will get a fee of only 1.1% of IPO proceeds. (Reuters)

Republicans will target tax cuts and the creation of only two tax rates. (WSJ)

Chevron (NYSE: CVX) executives in Brazil face criminal charges over a leak. (WSJ)

Glencore is near a deal to buy Viterra. (WSJ)

BHP Billiton (NYSE: BHP) says China’s demand for iron ore has flattened. (WSJ)

Moody’s may downgrade General Electric (NYSE: GE) and its financial arm. (WSJ)

Europe labor unions ask General Motors (NYSE: GM) to discuss the company’s plans over the next four years. (WSJ)

Many small customers shun Google’s maps because of fees. (NYT)

Saudi Arabia begins to export more oil to the U.S. and to open older oil fields to help ease the crude crisis. (FT)

The Commodities Futures Trading Commission will more carefully oversee the $300 trillion swaps markets. (FT)

China raises prices for gasoline and diesel for the second time in two months; China Petroleum (NYSE: SNP) and PetroChina (NYSE: PTR) lobbied for the move to help profits. (Bloomberg)

Microsoft (NASDAQ: MSFT) to launch Windows 8 in October. (Bloomberg)

Douglas A. McIntyre

The FBI may probe the causes of the MF Global bankruptcy (Reuters)

Sinopec (NYSE: SNP) may buy a stake in Galp Energia SGPS SA  (Bloomberg)

Douglas A. McIntyre

The mainland’s major index, the Shanghai Composite, has fallen 17% in the past year. Between the two markets are the listings of giants China Mobile (NYSE: CHL), China Petroleum (NYSE: SNP) and China Life Insurance (NYSE: LFC). It is extraordinary that telecom, energy and financial services industry shares should drop so sharply when none has any direct relationship to the others.

The four concerns about China’s financial health persist. The first is that inflation still lurks even though China’s economy has slowed. The sharp increase in food prices has many economists worried that real wages cannot keep up with the cost of living. And China counts on its middle class to consume a large portion of the output of the nation’s impressive manufacturing sector. Inflation will cause discretionary income to fall.

Property values, particularly in the largest cities, are high by historic measures and compared to similar real estate around the world. Any sharp slowdown in China’s GDP will undercut the ability developers to expand and rent these properties. Individual home owners could be left with large numbers of underwater mortgages. Analysts fear a rapid drop in property values similar to those in Japan three decades ago. Japan’s real estate fiasco helped ruin its GDP expansion, and the recovery from that took several years. By some standards, Japan’s economy has never recovered completely from the blow.

The chance of a trade war with the U.S. has increased sharply in the past several weeks. What was unimaginable has become possible. The U.S. Senate has agreed to a bill that would result in sanctions against China because of its currency problems. The Treasury Department recently delayed its biannual analysis of nations that have used their currencies to put the U.S. at a disadvantage with regard to trade balances. The Obama administration hopes quiet negotiations will resolve the yuan valuation issue. The belief that will work continues to dwindle.

And, the most significant concern about a sharp stall of China’s growth is Europe. Austerity and high unemployment have turned the EU economy back toward recession. If the sovereign debt crisis worsens, the recession could be deep and long. The EU economy is still the largest by GDP, about $2 trillion more than the U.S. A drop in demand for China’s exports could put manufacturing in the People’s Republic into a tailspin.

Stocks markets, some experts say, trade based on investor perceptions of what economies and earnings will be six months to a year into the future. China is in great trouble if there is truth to that.

Douglas A. McIntyre

Agrium, Inc. (NYSE: AGU) named Bull of the Day at Zacks.
Agnico-Eagle Mines Ltd. (NYSE: AEM) Raised to Outperform at Credit Suisse.
American Express Company (NYSE: AXP) Cut to Hold at Jefferies.
AMR Corporation (NYSE: AMR) Raised to Outperform at Rodman & Renshaw.
BHP Billiton (NYSE: BHP) Raised to Outperform at Credit Suisse.
Capital One Financial Corp. (NYSE: COF) Cut to Hold at Jefferies.
Chipotle Mexican Grill Inc. (NYSE: CMG) Started as Outperform with $370 target at Credit Suisse.
China Petroleum & Chemical Corp. (NYSE: SNP) Started as Neutral at Credit Suisse.
CNOOC Ltd. (NYSE: CEO) Started as Outperform at Credit Suisse.
The Jones Group Inc. (NYSE: JNY) Value stock of the day at Zacks.
LM Ericsson Telephone Co. (NASDAQ: ERIC) Raised to Buy at Citigroup.
PetroChina Co. Ltd. (NYSE: PTR) Started as Neutral at Credit Suisse.
Riverbed Technology, Inc. (NASDAQ: RVBD) Cut to Equal-Weight at Barclays.
SodaStream International Ltd. (NASDAQ: SODA) Raised to Buy at Deutsche Bank.
Sonoco Products Co. (NYSE: SON) Cut to Hold at Argus.
Stillwater Mining Company (NYSE: SWC) Removed from Focus List ar Credit Suisse.
W.R. Berkley Corp. (NYSE: WRB) named Bear of the Day at Zacks.

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 JON C. OGG

TransCanada stands to lose the most if the project is denied. The entire Keystone pipeline system is nearly fully contracted for a total of 900,000 barrels/day for an average term of 18 years. That is a big loss if the pipeline isn’t built. The largest producer in the oil sands is Syncrude, a joint venture that includes Imperial Oil Resources (wholly owned by Exxon Mobil Corp. (NYSE: XOM)), Suncor Energy Inc. (NYSE: SU), and China Petroleum & Chemical Corp. (NYSE: SNP) — Sinopec — among others. Other producers include ConocoPhillips Corp. (NYSE: COP), Chevron Corp. (NYSE: CVX), Murphy Oil Corp. (NYSE: MUR), Total SA (NYSE: TOT), Royal Dutch Shell plc (NYSE: RDS-A), BP plc. (NYSE: BP), and Devon Energy Corp. (NYSE: DVN).

These companies won’t lose everything because the bitumen from the oil sands will go somewhere, somehow. Unless, of course, the Canadian government decides to shut down every project in Alberta, and that simply will not happen. One of the big problems facing the producers now is that they’re crude is landlocked and sells at a substantial discount to WTI. For the week ending September 23rd, Heavy Hardesty grade crude sold for $78.28/barrel, while WTI sold for $80.29 and Brent sold for $109.17. Getting crude from Alberta to a coast, any coast, is critical for producers.

If the Keystone XL pipeline is killed, an expansion to an existing pipeline system to the US/Canadian west coast could take up some of the slack. Kinder Morgan Energy Partners LP (NYSE: KMP) is investigating an expansion to its Trans Mountain system and Enbridge Inc. (NYSE: ENB) has already begun the permitting process for a similar pipeline to the west.

Another interesting development are proposals from both of Canada’s major railroads to construct a pipeline-by-rail from Alberta to west coast. And while nothing officially like a pipeline-by-rail has been proposed for the run to the US Gulf Coast, rail traffic has already increased substantially from North Dakota south to Cushing and, eventually producers hope, to the Gulf.

In July weekly US rail carloads of petroleum and petroleum products hit a four-year high, and the August total of about 7,400 carloads is even higher. A rail tanker holds about 1,500 barrels, so every day about 1.6 million barrels of petroleum is moving around on the US rail network. Add to that another half a million barrels a day from the oil sands and that puts about another 2,500 tanker cars on the rails every day.

There were 750 reported rail accidents involving hazardous materials in 2010. The odds of a significant oil spill rise if we add more oil transport by rail.

The same is true if the Canadian crude is moved by truck. Truck transportation by surface road is even more expensive and prone to accidents. There were nearly 12,000 road accidents involving hazardous materials in 2010. Besides being much more expensive, more tanker trucks carrying up to 300 barrels of oil each raises again the odds on an environmentally significant spill.

So while pipeline spills are a concern, rail and truck accidents are far more common. The Keystone XL pipeline should be held to a very high safety standard, but it is probably the safest way to move the most Canadian crude.

The argument that Canada should stop development and extraction in the oil sands may make more environmental sense, but until a large-scale alternative transportation fuel is available at a reasonable price, oil sands development will very likely continue. And moving that oil by pipeline is really the only sensible option.

Paul Ausick