Calyon Securities Upgrades Oil Services

Ahead of the Bell: Oilfield Services.

NEW YORK (AP) -- A Calyon Securities analyst upgraded the oilfield services sector on Tuesday, saying the stocks have fallen too far.
Calyon Securities analyst Mark Urness hiked the sector to "Overweight" from "Marketweight" and upgraded a number of stocks including Baker Hughes Inc., Ensco International Inc., Halliburton Co., Oil State International Inc., Transocean Inc. and Weatherford International Inc.

Urness said fear has overcome greed. While it was only natural for prices to pull back from their peaks, an index of oilfield services companies is down 11 percent since mid-July. He said this is too far.

Investors appear to believe that the credit shocks enveloping the market are going to lead to "a dramatic slowing of the U.S. economy, eventually spreading globally and bringing down oil demand and prices," he said.

But fundamentals for the industry remain intact, he said. Economies in places like India and China continue to grow, leading to more demand for oil.

That will help these companies, which operate rigs helping energy companies extract oil and perform other services like drilling.