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Stock Market Today: Dow Ends Lower as Fed Fears Overshadow Pop in Pepsi

Stock Markets Oct 12, 2022 03:59PM ET
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By Yasin Ebrahim

Investing.com -- The Dow slipped Wednesday, as the Federal Reserve’s September minutes signaling higher for longer rates overshadowed a surge in Pepsi following better-than-expected quarterly results.

The Dow Jones Industrial Average fell 0.1% or 28 points, the Nasdaq fell 0.1%, and the S&P 500 fell 0.3%.

Federal Reserve policymakers continued to reiterate the need to push monetary policy into restrictive territory and keep rates at elevated levels until there was “compelling evidence” that inflation was on track to slow toward the Fed’s 2% target.

“With no notable pushback [in the FOMC minutes] against the current pace of rate hikes, we see the FOMC on track for another 75bp hike in November,” Morgan Stanley said in a note.

The minutes arrived as investors fret over an inflation report due Thursday that economists expect to show that core inflation, which excludes food and energy prices, continues to run hot.

Adding to those concerns, wholesale inflation released on Tuesday showed that price pressures for businesses increased at a faster pace than feared in September.

Energy, however, helped to keep the broader market above the flatline despite a slip in oil prices as Valero Energy Corporation (NYSE:VLO) and Coterra Energy Inc (NYSE:CTRA) and Phillips 66 (NYSE:PSX) racked up gains.

Consumer staples were driven higher PepsiCo (NASDAQ:PEP) after the company lifted its annual guidance and reported better-than-expected quarterly results, underpinned by price hikes. Its shares jumped 4%.

The snack and beverage giant’s ability to pass on higher costs to consumers has caught the eye of investors looking to weather the current market volatility amid economic uncertainty and rising interest rates.

“If you want to weather this volatility, until we answer the question of a shallow recession or not, Pepsi is the type of business that we would be looking at because it does have positive cash flow, good earnings structures going forward, and they've invested in their own future growth,” Brian Mulberry, client portfolio manager at Zacks said ahead of Pepsi’s quarterly results in a recent interview with Investing.com.

Technology remained under pressure as gains in Alphabet (NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT) were offset by a drag from weakness in chip stocks.

In other news, Moderna (NASDAQ:MRNA) jumped 8% after announcing that it would team up with Merck & Company Inc (NYSE:MRK) to develop and sell a cancer drug.

Stock Market Today: Dow Ends Lower as Fed Fears Overshadow Pop in Pepsi
 

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Comments (7)
me ish
me ish Oct 12, 2022 6:22PM ET
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Great! - more profits for big pharma and Moderna are teaming up with Merck to develop drugs to give you cancer - one way or another with Gates they're going to get what they want - to *******off loads of sheeple who just keep swallowing the corporate rubbish - the propaganda, the drugs, the fast food and alcohol - you name it - making profit from chronic disease and death.
Brad Albright
Brad Albright Oct 12, 2022 6:22PM ET
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This is true! There are ads all over TV advertising new cancer-causing drugs. Also, Bigfoot!
Jurgen Daub
Jurgen Daub Oct 12, 2022 6:22PM ET
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they must cause braincancer
Shep De
Shep De Oct 12, 2022 6:21PM ET
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Pepsi earnings show the consumer has plenty of dough, buying namebrand
JIM VETTER
JIM VETTER Oct 12, 2022 6:21PM ET
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uh-huh
Mark Westland
Mark Westland Oct 12, 2022 6:21PM ET
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buying those new cars like crazy. Don't even balk at buying homes with over 7% interest rates. Everything is booming
me ish
me ish Oct 12, 2022 6:01PM ET
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oil prices slipping even though OPEC are massively cutting production = sharp slowdown in the economy - sure folk need to treat themselves to feel better about all the big stuff they can't buy - so cheap nasty sugary stuff is what they buy - like alcohol and tobacco - makes people temporarily feel better - so that's why Pepsi is up - but big ticket items are out the window and autosales are crashing as are sub prime auto loan defaults and credit card debt is spiralling upwards as interest rates are hiked - grim for the lower and middle classes.
JIM VETTER
JIM VETTER Oct 12, 2022 6:01PM ET
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just to be clear, OPEC+ is cutting about 2 million barrels/day. Worldwide use is nearly 100 million barrels/ day. 2% is not massive
JIM VETTER
JIM VETTER Oct 12, 2022 5:16PM ET
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Lol... the bulls are banking on Pepsi?? ALL the data is pointing to a recession, continued and prolonged test hikes and they think Pepsi's guidance is going to buoy the market?? Unbelievable
Mark Westland
Mark Westland Oct 12, 2022 5:16PM ET
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You know what they say. If you can afford Pepsi, you can buy a new car no problem. Grab a house or 2 at 7% interest. Everything is booming. Pepsi just started a huge bull rally that will last year. I'm already feeling better myself. I just picked up 4 cokes for 5.00 on sale. To bad I can't afford the steak.
ShoreInvesting DotCom
ShoreInvesting DotCom Oct 12, 2022 4:41PM ET
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As a long term investor we dont care about politics. Feds decision to pump more money in 2019 / 2020 / 2021 grew the bubble and decision not to increase rates in 2019 gave rise to Inflation and house prices spiked to be beyond reach. The fire was lit then and now they are fire-fighters on two fronts. The bubble will burst but inflation seems sticky and people can no longer afford to buy a home. Buckle up for hard landing.
Robin Hood
RobinHdJr Oct 12, 2022 4:41PM ET
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carlos guo  Look how the Fed raises rates a measly 0.5 - 0.75 % compared to FFR under Reagan.  Under Biden, FFR is still at 3% despite breaking 40 year records for inflation. Under Reagan, inflation was lower but FFR was raised to 10%.  There is definitely a double standard going on... makes me think Fed only raises rates (substantially) under GOP leadership
ShoreInvesting DotCom
ShoreInvesting DotCom Oct 12, 2022 4:21PM ET
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This is like saying the Titanic is sinking but good news is you now have a seat at its upper class dining!
me ish
me ish Oct 12, 2022 4:21PM ET
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carlos guo  all the poor - whilst the first class passengers had life boats to save their lives - same old story - but ignorance of the working and middle classes doesn't help - if you look at the alternative news on the internet and not the mainstream propaganda, you'll realise just how bad things are already.
Robin Hood
RobinHdJr Oct 12, 2022 4:13PM ET
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The Fed has been talking about raising rates for several months, and we've known for years there is pop in Pepsi. Must be a slow news day. Yawn
Robin Hood
RobinHdJr Oct 12, 2022 4:13PM ET
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carlos guo  There it is. Now that's news
 
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