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Canadian Stocks Recover After Weak Start

The Canadian stock market recovered after a weak start Monday morning, with a few shares from financial, materials and energy sections edging higher on modest support.

Shares from cannabis section are down sharply after Aphria Inc. reported net loss for the quarter ended February 2019.

The mood is cautious after U.S. banks Goldman Sachs and Citigroup reported none too encouraging results. Weak crude oil prices too contributed to the lower opening this morning.

The benchmark S&P/TSX Composite Index is up 30.47 points, or 0.18%, at 16,511.00, off an early low of 16,443.34.

The Capped Healthcare Index is down nearly 4%, with key cannabis stocks plunging sharply. Aphria Inc. (APHA.TO) is plunging 14.5% after reporting net loss of $108.2 million or $0.43 per share for the quarter ended February 28, 2019, compared to net income of $12.9 million or $0.08 per share for the same period last year. Excluding non-cash impairment charges, adjusted net loss was $50.2 million, or $0.20 per share in the third quarter.

Cronos Group (CRON.TO) is down nearly 7% and Green Organic Dutchman Holdings (TGOD.TO) is losing about 6.4%.

Aurora Cannabis (ACB.TO), Hexo Corp. (HEXO.TO), Canopy Growth Corporation (WEED.TO) and CannTrust Holdings Inc. (TRST.TO) are down 3.5% to 5.2%.

In the materials space, Lundin Mining Corp. (LUN.TO) shares are gaining 6.3% after the company agreed to acquire 100% ownership stake in Mineração Maracá Indústria e Comércio S/A, which owns the Chapada copper-gold mine located in Brazil from Yamana Gold Inc. (YRI.TO) for cash consideration of $800 million, subject to customary adjustments.

In addition, Yamana will retain a 2.0% net smelter return royalty on future gold production from the Suruca gold deposit and receive contingent consideration of up to US$125 million over five years, subject to certain gold price thresholds being met. Yamana will also receive contingent consideration of US$100 million on potential construction of a pyrite roaster. Yamana Gold Inc. shares are down by about 5%.

In the financial space, Royal Bank of Canada (RY.TO), Toronto-Dominion Bank (TD.TO), Bank of Nova Scotia (BNS.TO), Bank of Montreal (BMO.TO), Canadian Imperial Bank of Commerce (CM.TO) and National Bank of Canada (NA.TO) are up 0.3 to 0.5%.

Fairfax Financial Holdings (FFH.TO) is gaining nearly 1%, Manulife Financial Corporation (MFC.TO) is up 0.8% and Sun Life Financial Inc. (SLF.TO) is advancing 0.5%.

In the energy section, ARC Resources (ARX.TO), Tourmaline Oil Corp. (TOU.TO), Suncor Energy (SU.TO) and Vermilion Energy (VET.TO) are modestly higher. Athabasca Oil Corporation (ATH.TO) is rising nearly 2%.\

On the economic front, a report from the Canadian Real Estate Association said home sales via Canadian MLS Systems edged up 0.9% in March following a sharp drop in February. The activity in March was near some of the lowest levels recorded in the last six years.

U.S. stocks are lower with investors reacting negatively to results from Goldman Sachs and Citigroup.

In U.S. economic news, the New York Federal Reserve released a report showing growth in regional manufacturing activity picked up somewhat in April but remained fairly subdued.

European stocks are turning in a mixed performance and markets in Asia ended mixed, with investors largely making cautious moves.

In commodities, West Texas Intermediate Crude oil futures for May are down $0.64, or 1%, at $63.25 a barrel.

Gold futures for June are down $5.00, or 0.39%, at $1,290.20 an ounce.

Silver futures for May are declining $0.093, or 0.62%, at $14.870 an ounce, while Copper futures for May are down $0.0255, or 0.87%, at $2.9205 per pound.

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