Wall St ends volatile day lower after Fed minutes, PPI

A very choppy day with the Dow up and down a dozen times or more during the session, but the good news is that for most of the upticks it was up 200 points or more, as was also true for both the Nasdaq and S&P.  Then all three indexes came crashing down in the final half hour to close very modestly in the red. Today’s market action illustrates just how fickle things have become – and how sensitive to any readings that don’t hit the bullseye as the PPI number came in at 8.5% and, even though it was expected at just 1/10% lower, and even though it was considerably lower than the 8.7% in August, it was still enough to send everyone into turmoil. 

And the 8.5% did nothing to budge the Fed with them doubling down “in unison regarding the commitment toward curtailing inflation and staying the course.” So, as today’s expert put it, “The question for the market is where is the transition from 75 basis points to 50 and 25. That’s what the market is focused on.”  Thursday’s CPI data is considered even more key and is anxiously awaited. Volume was below average at 10 billion. 

Wed  October 12, 2022  6:25 PM

Wall St ends volatile day lower after Fed minutes, PPI

By Caroline Valetkevitch

DJ: 29,239.19  +36.31         NAS: 10,426.19  -115.91        S&P: 3,588.84  -23.55      10/11

DJ: 29,210.85  -28.34          NAS: 10,417.10  -9.09            S&P: 3,577.03  -11.81      10/12

NEW YORK, Oct 12 (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 (.SPLRCU) were down 3.4% while real estate (.SPLRCR) 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 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. read more  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. read more

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) 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 (.SPSY) ended down 0.3%.

Among gainers, PepsiCo Inc (PEP.O) 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. read more  Alcoa Corp (AA.N) 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. read more

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.