Oil prices have dropped like a rock, and Americans are driving more as a result. So much for $4 gasoline changing the world. The green wave has run into a brick wall of lower crude prices.

In 2008, oil refiners like Tesoro Corp. (NYSE: TSO) had trouble making money due to intense volatility of prices. This year, it's a different story. Refiners make money by buying crude, processing and then selling gasoline and other by-products.

Despite the recent rally, this has been the most difficult period for investors since the Great Depression, and many trying to time a bottom in this market have been burned.

And the reality is that we are still not out of the woods. So is it time to give up?

Not at all!

There are companies operating in this environment that are actually growing their business despite the recession. And these stocks should hold their own in this bear market, even if we retest the recent lows.

MOST NOTEWORTHY: StoneMor Partners, Suntech Power and Tesoro were today's noteworthy initiations:

• Morgan Keegan initiated StoneMor Partners (NASDAQ: STON) with a Market Perform rating. The firm has a low level of confidence in STON's financial projections given its vulnerability to changes in state and local regulations, and financial reporting complexities.
  
• Jesup & Lamont initiated Suntech Power (NYSE: STP) with a Buy based on the company's leading position in solar PV, industry growth and polysilicon supply agreements in place.
  
• Tesoro (NYSE: TSO) was assumed with an Underweight rating at JP Morgan. The firm expects the West Coast margins to remain weak given the decline in the gasoline demand and capacity increases of the majors.

OTHER INITIATIONS:

• RBC Capital initiated Agrium (NYSE: AGU) with an Outperform rating and $115 target.
  
• Merrill initiated Kohlberg Capital (NASDAQ: KCAP) with a Neutral rating.
  
• Caris started Newell Rubbermaid (NYSE: NWL) with an Average rating and $24 target.

MOST NOTEWORTHY: The ocean shippers sector, Tesoro, Siemens AG and MGI Pharma were today's noteworthy upgrades:

• Bear Stears upgraded the ocean shippers sector to Market Weight from Market Underweight, citing higher day rates in the dry bulk market. The firm sees potential upside for dry bulk firms Eagle Bulk Shipping (NASDAQ: EGLE), Quintana Maritime Limited (NASDAQ: QMAR) and Ultrapetrol Ltd (NASDAQ: ULTR).
  
• Bernstein raised shares of Tesoro Corporation (NYSE: TSO) to Outperform from Market Perform and expects a rebound in West Coast refining margins.
  
• ING upgraded shares of Siemens AG (NYSE: SI) to Buy from Hold on valuation and the possibility the company may exit businesses.
  
• MGI Pharma (NASDAQ: MOGN) was upgraded at JP Morgan to Overweight from Neutral, citing expectations for a strong Q3, Aloxi re-acceleration, Dacogen growth, and Auqavan opportunity.

OTHER UPGRADES:

• UBS upgraded shares of Agnico-Eagle (NYSE: AEM) to Buy from Neutral.
  
• Banc of America upgraded Everest RE Group (NYSE: RE) and PartnerRe (NYSE: PRE) to Buy from Neutral.
  
• Calamos Asset Management (NASDAQ: CLMS) was upgraded to Neutral from Sell at Goldman Sachs.

MOST NOTEWORTHY: Sprint Nextel, Tesoro, VeriSign, Healthcare Property and Resources Connection were today's noteworthy downgrades:

• Goldman downgraded shares of Sprint Nextel Corporation (NYSE: S) to Neutral from Buy to reflect continuing turnaround delays, macro headwinds and competition.
  
• Tesoro Corporation (NYSE: TSO) was downgraded to Neutral from Outperform at Credit Suisse, citing increased concerns regarding West Coast margins.
  
• The firm also lowered VeriSign Inc (NASDAQ: VRSN) to Neutral from Outperform, as they believe the company's reorganization could require more time than investors anticipate.
  
• Friedman Billings downgraded Healthcare Property (NYSE: HCP) to Market Perform from Outperform on valuation. Shares were also downgraded to Neutral from Buy at UBS.
  
• Resources Connection (NASDAQ: RECN) was downgraded to Hold from Buy at Stifel, to Market Perform from Outperform at JMP Securities and to Peer Perform from Outperform at Bear following its Q1 report.

OTHER DOWNGRADES:

• Walgreen (NYSE: WAG) was downgraded to Neutral from Overweight at JMP Securities.
  
• JP Morgan downgraded Staples Inc (NASDAQ: SPLS) to Underweight from Neutral.
  
• UBS downgraded Under Armour Inc (NYSE: UA) to Neutral from Buy.
  
• Bear downgraded CNOOC Ltd (NYSE: CEO) to Underperform from Peer Perform.

MOST NOTEWORTHY: GlobalSantaFe Corp, Transocean, Frontier Oil, Tesoro and Audio Codes were today's noteworthy upgrades:

• JP Morgan upgraded shares of GlobalSantaFe Corporation (NYSE: GSF) and Transocean Inc (NYSE: RIG) to Neutral from Underweight based on valuation and improving deepwater rig fundamentals.
  
• Frontier Oil Corporation (NYSE: FTO) was upgraded at Banc of America to Buy from Neutral as they believe the company's assets are ideally located to access cheap Canadian oil sands production. They feel the stock should trade closer to its replacement value, which they estimate at $55/share.
  
• The firm also raised Tesora Corporation (NYSE: TSO) to Buy from Neutral, as the firm believes Terero is the best play on the extended refining cycle given its exposure to California.
  
• CIBC upgraded shares of AudioCodes (NASDAQ: AUDC) to Sector Outperformer from Sector Performer on valuation after their checks suggested the company's business is stabilizing and cost cutting is tracking ahead of plan, which could bring upside EPS estimates.

OTHER UPGRADES:

• GSI Commerce (NASDAQ: GSIC) was upgraded to Buy from Hold at Jefferies.
  
• Apache Corporation (NYSE: APA) was upgraded to Buy from Neutral at Goldman Sachs.
  
• Amgen Inc (NASDAQ: AMGN) was upgraded to Buy from Neutral at Merrill Lynch.
  
• BB&T Capital upgraded shares of Skechers USA (NYSE: SKX) to Buy from Hold.
  
• Bernstein upgraded shares of Cognizant Technology (NASDAQ: CTSH) to Outperform from Market Perform.

MOST NOTEWORTHY: Refiners, MasTec, Cognos, Forest Labs and Reuters Group were today's noteworthy upgrades:

• Bernstein upgraded shares of Marathon Oil Corporation (NYSE: MRO), Tesoro Corporation (NYSE: TSO), Sunoco Incorporated (NYSE: SUN) and Valero Energy Corporation (NYSE: VLO) to Market Perform from Underperform.
• MasTec Incorporated (NYSE: MTZ) was upgraded to Buy from Accumulate at Think Equity and to Buy from Hold at SMH Capital on valuation following yesterday's sell-off.
• JP Morgan upgraded shares of Cognos Incorporated (NASDAQ: COGN) to Overweight from Neutral citing solid end demand, expanded sales capacity, indications that C8 adoption should see an uptick, and the Applix Inc (NASDAQ: APLX) acquisition.
• Forest Laboratories Inc (NYSE: FRX) was upgraded to Buy from Hold at Jefferies, as the firm believes Forest's victory in the Lexapro patent case eliminates a major overhang and returns the focus to the company's pipeline.
• Lehman upgraded shares of Reuters Group (NASDAQ: RTRSY) to Overweight from Equal Weight to reflect benefits from the company's merger with Thomson Corporation (NYSE: TOC).

OTHER UPGRADES:

• UBS upgraded shares of General Mills Inc (NYSE: GIS) to Buy from Neutral.
• Thornburg Mortgage (NYSE: TMA) was upgraded to Sector Perform from Underperform at RBC Capital Markets.
• CIBC World Markets upgraded EDO Corporation (NYSE: EDO) to Sector Outperformer from Sector Performer.
• Bernstein upgraded shares of Rio Tinto (NYSE: RTP) to Outperform from Market Perform and shares of Anglo American (NASDAQ: AAUK) to Market Perform from Underperform.

U.S. stocks were mixed on light trading volume going into a long holiday weekend. The Dow was down 0.43%, the NASDAQ 100 was down 0.39% and the S&P 500 was down 0.33%, while 10-year bond rates rose to 4.624%. The CBOE VIX was up .54 to 11.07.

• Valero Energy Corporation's (NYSE: VLO) option implied volatility of 32 suggests decreasing risk. Valero owns and operates 18 refineries in the U.S., Canada and the Caribbean with a combined throughput capacity of approximately 3.3 million barrels a day. Crude oil futures were down .46% to $62.37. Valero's overall option implied volatility of 32 is below its 26-week average of 37, according to Track Data, suggesting decreasing price risks.
• Tesoro Corporation's (NYSE: TSO) option implied volatility of 34 suggests decreasing risk. Tesero, an independent refiner and marketer of petroleum products, is trading at $65.49. Tesero's overall option implied volatility of 34 is below its 26-week average of 37, according to Track Data, suggesting less price risks.
• BP plc's (NYSE: BP) option implied volatility of 19 suggests decreasing risk. BP recently traded at $66.47. BP's option implied volatility of 19 is below its 26-week average of 21, according to Track Data, suggesting non-directional price risks.
• Chevron Corporation's (NYSE: CVX) option implied volatility of 21 suggests non-directional price risks. Chevron recently traded at $73.08. Chevron's overall option implied volatility of 21 is near its 26-week average of 22, according to Track Data, suggesting non-directional price risks.
• Exxon Mobil Corporation's (NYSE: XOM) option implied volatility of 22 suggests non-directional price risks. Exxon recently traded $75.67. A Federal Court of appeals court cut in half a $5 billion jury award for punitive damages against Exxon in the 1989 Valdez oil spill. Crude oil futures were down .46% to $62.37. Exxon's overall option implied volatility of 22 is near its 26-week average, according to Track Data, suggesting non-directional price fluctuations.

Option volume leaders today were Altria Group, Inc (NYSE: MO), Research in Motion Limited (NASDAQ: RIMM), General Electric Company (NYSE: GE), and Apple Computer, Inc (NASDAQ: AAPL).

Options analysis provided by Paul Foster, options strategist for Theflyonthewall.com.