Stocks Tread Water as Oil Prices Slip

Gibson, Hexo in Focus

Canada's main stock index opened flat on Monday as the heavyweight energy sector declined tracking lower crude prices, and investors awaited a pivotal meeting of the U.S. Federal Reserve.

The S&P/TSX Composite Index eked up 11.81 points to close Monday and the week at 16,313.72

The Canadian dollar doffed 0.47 cents to 74.57 cents U.S.

JP Morgan raised the rating on Gibson Energy to overweight from neutral. Gibson shares hiked 30 cents, or 1.3%, to $23.20.

CIBC cut the rating on Hexo Corp. to neutral from outperform. Hexo shares docked three cents to $7.49.

RBC raised the target price on Alacer Gold to $5.50 from $4.00. Alacer shares spiked 32 cents, or 8%, to 4.34.

On the economic front, Statistics Canada reported that foreign investors reduced their holdings of Canadian securities by $12.8 billion in April, mainly in the form of equities.

At the same time, Canadian investors marginally reduced their holdings of foreign securities.

As a result, international transactions in securities generated a net outflow of funds of $12.6 billion from the Canadian economy in April.

ON BAYSTREET

The TSX Venture Exchange inched up 0.06 points to begin Monday at 587.90

All but two of the 12 Toronto subgroups began the day positive, as information technology gained 0.4%, while industrials and gold poked up 0.3% each.

The two laggards were energy and communications, swooning 0.2% each.

ON WALLSTREET

Stocks were little changed on Monday as investors looked ahead to a crucial Federal Reserve meeting this week.

The Dow Jones Industrial Average gained 33.84 to open Monday at 26,123.45.

The S&P 500 regained 5.81 points at 2,892.79,

The NASDAQ Composite picked up 57.61 points to 7,854.27.

Disney shares slipped 0.6% after an analyst at Imperial Capital downgraded the stock to in-line from outperform, citing a “record ” valuation.

Shares of auction house Sotheby’s shot up nearly 60% on news it will be bought for $3.7 billion by BidFair USA, a company owned by telecom businessman Patrick Drahi. Array BioPharma shares also surged nearly 60% after the company was acquired by Pfizer for $10.6 billion.

The Fed is scheduled to start a two-day monetary policy meeting on Tuesday. Expectations for any policy changes are low, but investors will look for clues about potential rate cuts in July and later in 2019.

Investors are betting on the Fed cutting rates in July and September as well as December. The market has been clamoring for lower rates amid indications of potentially slower economic growth. In theory, lower rates would boost economic growth.

The Fed will make its monetary-policy announcement on Wednesday. Fed Chair Jerome Powell is scheduled to hold a news conference after the announcement.

Prices for the benchmark 10-year U.S. Treasury slumped, raising yields to 2.10% from Friday’s 2.08%. Treasury prices and yields move in opposite directions.

Oil prices slipped 34 cents to $52.17 U.S. a barrel.

Gold prices eked higher 30 cents at $1,344.80 U.S. an ounce.