Wall Street little changed ahead of Trump-Xi meeting

By Yashaswini Swamynathan

REUTERS - U.S. stocks were little changed in choppy trading on Thursday as investors reassessed their bets ahead of a potentially tense meeting between the presidents of U.S. and China and as the chances of quick fiscal stimulus ebbed.

U.S. 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 U.S.-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 U.S. House of Representatives Speaker Paul Ryan said there was no consensus on tax reform and that it would take longer to accomplish than healthcare.

At 9:44 a.m. ET the Dow Jones Industrial Average was up 3.09 points, or 0.01 percent, at 20,651.24, the S&P 500 was up 0.46 points, or 0.01 percent, at 2,353.41 and the Nasdaq Composite was up 5.54 points, or 0.09 percent, at 5,870.01.

Five of the 11 major S&P sectors were lower. The S&P 500 financial index was down 0.3 percent. 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 percent. The index is trading at about 18 times forward earnings estimates, above its long-term average of 15.

Earlier, stock index futures got a boost from a U.S. Labor Department report that showed new applications for unemployment benefits recorded their biggest drop in nearly two years last week.

In stocks, Advanced Micro Devices dropped 6.8 percent to $13.22 after Goldman Sachs initiated overage with a "sell" rating.

Among retailers, Costco gained 2 percent to $170.33 after reporting March sales, while Bed Bath & Beyond rose 6 percent to $39.98 after reporting quarterly results.

Constellation Brands jumped 7.4 percent to $173.97 fter the Corona beer maker's better-than-expected quarterly results and upbeat full-year forecast.

Advancing issues outnumbered decliners on the NYSE by 1,501 to 1,011. On the Nasdaq, 1,248 issues rose and 996 fell.

The S&P 500 index showed one 52-week high and two lows, while the Nasdaq recorded nine highs and 26 new lows.

(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Savio D'Souza)