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US stocks rose moderately on Thursday, clawing back some of their losses from the previous session as investors digest the Federal Reserve’s comments on plans to shrink its balance sheet and high stock valuations.

The S&P 500 and the Dow Jones Industrial Average both ticked 0.2 per cent higher at 2,355.57 and 20,671.28 while the Nasdaq Composite tacked on 0.1 per cent to 5,871.53.

The modest gains come following a late sell-off on Wednesday after Fed minutes showed that central bank officials had expressed concerns over high US equity prices. The minutes also showed that policymakers expect the Fed to begin reducing the size of its balance sheet by the end of the year and uncertainty over the pace and size of the reductions have added to yesterday’s bearish moves.

Analysts are not expecting any big moves ahead of tomorrow’s closely watched jobs report for March. The market is forecasting total nonfarm payrolls to rise by 180,000 and the unemployment rate to tick down slightly to 4.7 per cent.

Traders also have their eyes on news out from the first official summit between President Donald Trump and his Chinese counterpart Xi Jinping, which kicks off today.

Energy and consumer stocks were the day’s biggest gainers while bond proxies such as utilities and telecom stocks – which are prized for their stead dividend streams – were the laggards.

The bond rally also took a breather, with the yield on the 10 year Treasury up 1.6 basis points to 2.353 per cent.

Copyright The Financial Times Limited 2017. All rights reserved.
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