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Wall St ends volatile day lower after Fed minutes, PPI

Economy Oct 12, 2022 06:32PM ET
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© Reuters. A trader works on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., October 11, 2022. REUTERS/Brendan McDermid
 
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By Caroline Valetkevitch

NEW YORK (Reuters) - U.S. stocks ended a choppy session slightly lower on Wednesday after minutes from the last Federal Reserve meeting showed policymakers agreed they needed to maintain a more restrictive policy stance.

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

Recent market weakness has been tied in part to increasing fears among investors that aggressive rate hikes by the Fed could tip the world's largest economy into a recession.

Rate-sensitive utilities were down 3.4% while real estate fell 1.4%. They led percentage declines among S&P sectors for the day.

Fed officials in the recent speeches have come out "in unison regarding the Fed's commitment toward curtailing inflation and staying the course," said Quincy Krosby, chief global strategist at LPL Financial (NASDAQ:LPLA) in Charlotte, North Carolina.

"There's an understanding now the Fed is going to keep going. The question for the market is where is the transition from 75 basis points to 50 and 25. That is what the market is focused on I think."

At the September meeting, Fed officials raised interest rates by three-quarters of a percentage point for the third straight time in an effort to drive inflation down from 40-year highs.

The market bounced around just after the open, with data earlier showing a surprise rise in September producer prices. The Labor Department's producer prices index rose 8.5% in the 12 months through September, slightly higher than an estimated 8.4% rise. Still, the reading was lower than an 8.7% increase in August.

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

Thursday's report on U.S. consumer prices is considered even more key and has been anxiously awaited by investors, along with the start of third-quarter U.S. earnings, which kick off with results from some of the big U.S. banks on Friday.

The S&P 500 financial index ended down 0.3%.

Among gainers, PepsiCo (NASDAQ:PEP) Inc rose 4.2% after the soft-drinks maker raised its annual revenue and profit forecasts on firm demand for its sodas and snacks despite multiple price increases.

Alcoa (NYSE:AA) Corp jumped 5.3%. The Biden administration is weighing restricting imports of Russian aluminum as it charts possible responses to Moscow's military escalation in Ukraine, a person briefed on the conversations told Reuters.

Declining issues outnumbered advancing ones on the NYSE by a 1.64-to-1 ratio; on Nasdaq, a 1.15-to-1 ratio favored decliners.

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

Volume on U.S. exchanges was 10.01 billion shares, compared with the 11.68 billion average for the full session over the last 20 trading days.

Wall St ends volatile day lower after Fed minutes, PPI
 

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Comments (32)
JIM VETTER
JIM VETTER Oct 12, 2022 5:24PM ET
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We're already in a recession!
Mark Westland
Mark Westland Oct 12, 2022 3:02PM ET
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CPI will move the market more than the FED today
Cristian Choque Ruiz
Cristian Choque Ruiz Oct 12, 2022 2:45PM ET
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SELL NASDAQ !!!
Mark Westland
Mark Westland Oct 12, 2022 2:09PM ET
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Talking about being vague. Very subtle on the report. Will it hold up in power hour?
Chris Smith
Chris Smith Oct 12, 2022 2:09PM ET
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I read it that they softened thier stance. Now talks about slowing rates at some point. Still want restrictive rates. Basically not same message, they softened a bit
Mark Westland
Mark Westland Oct 12, 2022 2:09PM ET
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Chris Smith I know, but they weren't really that specific
Mark Westland
Mark Westland Oct 12, 2022 2:09PM ET
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Chris Smith The question is we're the kind of vague because they didn't want a sell off. Their just waiting for the new numbers to come out and then they'll be more clear
First Last
First Last Oct 12, 2022 2:09PM ET
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The Fed is always vague when talking about future policies.
CHUKWUNAZA MBAH
CHUKWUNAZA MBAH Oct 12, 2022 2:06PM ET
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please can anyone help me with a site/group where these news releases are interpreted in simpler language as regards how it affects the currency concerned.
Olabode Afolayan
Olabode Afolayan Oct 12, 2022 2:06PM ET
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this is probably the simplest you'd find anywhere. I think you need to do some basic trainings so that the nomenclature being used become familiar to you. all the best
Keith Wilson
Keith Wilson Oct 12, 2022 2:03PM ET
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You mean inflation is high so the Fed has to raise rates? Unheard of
Kelvin Leung
Kelvin Leung Oct 12, 2022 1:58PM ET
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Fed is driving forward while looking at the rearview mirror. All the inflation data are months behind the actual. Fed should be forward looking rather than backward looking. If it was the case, they would have started raising rates long before.
First Last
First Last Oct 12, 2022 1:58PM ET
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Most traders use lagging indicators.  How is the Fed supposed to predict when/if Putin will come to his senses?
Kelvin Leung
Kelvin Leung Oct 12, 2022 1:57PM ET
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fed is driving forward while looking at the rearview mirror. All the inflation data are months behind the actual. By the time, they do see decrease in inflation, it is already too late. Fed should be forward looking rather than backward looking. If it was the case, they would have started raising rates long before.
Kelvin Leung
Kelvin Leung Oct 12, 2022 1:57PM ET
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fed is driving forward while looking at the rearview mirror. All the inflation data are months behind the actual. By the time, they do see decrease in inflation, it is already too late. Fed should be forward looking rather than backward looking. If it was the case, they would have started raising rates long before.
Mark Westland
Mark Westland Oct 12, 2022 1:54PM ET
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The market so quiet I can here crickets
 
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