Wall St. Flat As Energy Drags, Consumer Gains

Wall Street was little changed on Monday as losses in energy shares were offset by gains in consumer discretionary stocks and investors paused ahead of the U.S. Federal Reserve’s meeting on monetary policy this week.

U.S. crude prices fell more than 4 percent after Iran quashed hopes of a quick deal by major producers to freeze output. Brent crude fell below $40 a barrel.

Shares of Chevron (CVX.N) and Exxon (XOM.N) were off 0.7 percent. [O/R]

“Looks like a slight hangover from the party that we had last week,” said Jack Ablin, chief investment officer at BMO Private Bank in Chicago.

A recent recovery in oil prices and data pointing to a strengthening U.S. economy have helped stocks recover from a steep selloff at the start of the year. The S&P 500 is now down only about 1 percent in 2016. The index was down as much as 10.5 percent in mid-February.

“Call it the calm before the storm. This is really probably not a day to make too many big bets, given that we could have some outlook changing information in the next couple of days,” Ablin said.

The Fed is not expected to raise interest rates at the two-day meeting, which begins on Tuesday, but investors will be on the lookout for its view on the economy and clues on the path of future hikes.

At 11:27 a.m. ET, the Dow Jones industrial average .DJI was up 4.08 points, or 0.02 percent, at 17,217.39, the S&P 500 .SPX was down 4.39 points, or 0.22 percent, at 2,017.8 and the Nasdaq Composite .IXIC was up 4.40 points, or 0.09 percent, at 4,752.86.

Seven of the 10 major S&P sectors were lower. The energy sector .SPNY fell 0.78 percent. Consumer discretionary .SPLRCD was up 0.43 percent.

McDonald’s (MCD.N) was up 1.3 percent and gave the biggest boost to the Dow, while Gilead Sciences (GILD.O) rose 1.9 percent and propped up the S&P 500 and the Nasdaq. Starwood Hotels & Resorts (HOT.N) was up 6.7 percent at $75.18 after the hotel operator received a takeover offer of $76 per share from a consortium of companies. Marriott (MAR.O), which was set to take over Starwood, was up 1.7 percent at $70.06.

GW Pharmaceuticals (GWPH.O) soared as much as 129 percent to $88.22 after the company’s experimental cannabis-based drug succeeded in treating children with a rare form of severe epilepsy in a keenly anticipated clinical trial.

Declining issues outnumbered advancing ones on the NYSE by 1,791 to 1,065. On the Nasdaq, 1,382 issues fell and 1,223 rose.

The S&P 500 index showed 10 new 52-week highs and no new lows, while the Nasdaq recorded 26 new highs and 15 lows.

REUTERS