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US stocks reverse losses on signs of debt ceiling compromise

S&P 500 recovers while government bond prices also strengthen

Stocks on Wall Street rebounded from an early morning sell-off on Wednesday as Republicans appeared to offer a path, albeit temporary, to ending the US debt ceiling stand-off in Congress.

Mitch McConnell, Senate minority leader, said in a statement on Wednesday that his Republican party would support an emergency extension on the federal government debt ceiling into December, which would stave off the immediate threat of a US default.

The benchmark S&P 500 reversed its early losses of as much as 1.3 per cent, closing up 0.4 per cent following the comments. The technology-heavy Nasdaq Composite climbed 0.5 per cent.

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