Wall St ends volatile day lower after Fed minutes, PPI

  • U.S. producer prices rise more than expected in September
  • Consumer price data due Thursday
  • Indexes: Dow down 0.1%, S&P 500 down 0.3%, Nasdaq down 0.1%

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

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., September 26, 2022. REUTERS/Brendan McDermid

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.

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

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