Wall St ends volatile day lower after Fed minutes, PPI

  • US producer prices rise more than expected in September
  • Consumer price data on Thursday
  • Indices: Dow down 0.1%, S&P 500 down 0.3%, Nasdaq down 0.1%

NEW YORK, Oct 12 (Reuters) – US stocks ended a choppy session slightly lower on Wednesday after minutes from the Federal Reserve’s last meeting showed policymakers agreed they needed to maintain a tighter monetary stance.

The September meeting minutes also showed that many Fed officials stressed the cost of not doing enough to bring down inflation.

The recent market weakness is partly due to growing fears among investors that aggressive rate hikes by the Fed could plunge the world’s largest economy into recession.

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Rate-sensitive utilities (.SPLRCU) fell 3.4%, while real estate (.SPLRCR) fell 1.4%. They led to percentage declines among S&P sectors on the day.

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In recent speeches, Fed officials “commented unanimously on the Fed’s commitment to containing inflation and staying the course,” said Quincy Krosby, chief global strategist at LPL Financial in Charlotte, North Carolina.

“There is now a consensus that the Fed will proceed. The question for the market is where the transition from 75 basis points to 50 and 25 is. That’s what the market is focused on, I think.”

At the September meeting, Fed officials hiked interest rates by three-quarters of a percentage point for the third straight month to push inflation down from 40-year highs. Continue reading

The market rallied shortly after the open, with earlier data showing a surprise rise in producer prices in September. The Labor Department’s Producer Price Index rose 8.5% in the 12 months to September, slightly more than an estimated 8.4% increase. Still, the reading was below an 8.7% gain in August. Continue reading

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The Dow Jones Industrial Average (.DJI) fell 28.34 points, or 0.1%, to 29,210.85, the S&P 500 (.SPX) lost 11.81 points, or 0.33%, to 3,577.03 and the Nasdaq Composite (.IXIC) fell 9.09 points, or 0.09%, to 10,417.10.

Thursday’s US consumer price report is considered even more important and has been eagerly awaited by investors, along with the start of US third-quarter earnings starting on Friday with results from some of the big US banks.

The financial index S&P 500 (.SPSY) closed down 0.3%.

Among the gainers, PepsiCo Inc (PEP.O) rose 4.2% after the soft drink maker raised its annual sales and profit forecasts on firm demand for its soda and snack foods despite multiple price hikes. Continue reading

Alcoa Corp (AA.N) rose 5.3%. The Biden administration is considering restricting imports of Russian aluminum as it charts possible responses to Moscow’s military escalation in Ukraine, a person briefed on the talks told Reuters. Continue reading

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Declining issuance outweighed the NYSE 1.64 to 1; on the Nasdaq, a 1.15 to 1 ratio favored relegators.

The S&P 500 posted no new 52-week highs and 78 new lows; the Nasdaq Composite posted 20 new highs and 433 new lows.

Volume on US exchanges was 10.01 billion shares compared to the average of 11.68 billion for the entire session over the last 20 trading days.

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Additional reporting by Ankika Biswas, Shreyashi Sanyal & Bansari Mayur Kamdar in Bengaluru; Edited by Anil D’Silva, Arun Koyyur and Deepa Babington

Our standards: The Thomson Reuters Trust Principles.

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