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US:Wall St little changed ahead of Trump-Xi meeting

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[WASHINGTON ] US stocks were little changed in choppy trading on Thursday as investors reassessed their bets ahead of a potentially tense meeting between the presidents of US and China and as the chances of quick fiscal stimulus ebbed.

US President Donald Trump and his Chinese counterpart, Xi Jinping, start their two-day meeting on Thursday and top of the agenda is the possibility of Trump using US-China trade ties to pressure Beijing to do more to rein in North Korea's arms program. "The Trump Xi meeting is in focus and we don't expect any material changes, other than tough talk and a good talking point for tomorrow's newspaper headlines," Peter Cardillo, chief market economist at First Standard Financial wrote in a note.

The meeting comes as some investors question Trump's ability to deliver on his pro-growth promises, such as tax cuts, following recent setbacks in pushing reforms through Congress.

The Federal Reserve indicated changes to its bond investment policy this year as it aims to trim its balance sheet. Another dent came after US House of Representatives Speaker Paul Ryan said there was no consensus on tax reform and that it would take longer to accomplish than healthcare.

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At 9.44 am ET the Dow Jones Industrial Average was up 3.09 points, or 0.01 per cent, at 20,651.24, the S&P 500 was up 0.46 points, or 0.01 per cent, at 2,353.41 and the Nasdaq Composite was up 5.54 points, or 0.09 per cent, at 5,870.01.

Five of the 11 major S&P sectors were lower. The S&P 500 financial index was down 0.3 per cent. Financial stocks have largely outperformed in a post-election rally, sparked by Trump's pro-growth plans.

However, the minutes of the Fed's latest meeting showed officials "viewed equity prices as quite high relative to standard valuation measures," adding to jitters over lofty valuations as the first-quarter earnings season approaches.

Earnings of S&P 500 companies are expected to have risen 10.1 per cent. The index is trading at about 18 times forward earnings estimates, above its long-term average of 15.