The bulls would like to end the month in style, but mixed economic data has provided a rocky start. Several economic reports were released this morning, including the ADP Employment report, the Chicago PMI and the final data on second quarter GDP. Bank of America (BAC), Ameriprise Financial (AMP) and Nike (NKE) are stocks in the news today. Overall, the major market indices have bucked the historical trend to lose ground in September.

Second quarter GDP was revised up to a decline of 0.7 percent from the prior reading of -1.0 percent. Economists were expecting the figure to fall 2-tenths to -1.2 percent. This report confirms the view of most economists that the recession ended in the second quarter and that third quarter GDP will be positive.

The ADP Employment report for September showed a decline of 254,000 private payrolls. This was worse than expected, though an improvement from August when 298,000 private payrolls were lost. This might raise some concern about the employment report Friday, although the ADP data hasn't always closely tracked with the government reading. The ADP report does not include government jobs like the BLS data. The fact is that payrolls remain a concern, though we are seeing improvement, albeit at a slow pace.

The Chicago PMI data has had a negative impact on trading Wednesday thanks to a disappointing drop in the index. Not only did the index not rise the two points expected, but it fell back into contraction territory at 46.1. In August, the index was right at the 50.0 level and this drop in September has not set well with traders.

Merger activity got the week off to a great start Monday and we continue to get further announcements. BAC announced that it would sell long-term assets to AMP for $1 billion. Ameriprise expects this deal to be accretive to earnings within one year, which was sent the company's shares higher by more than 13 percent in early trading at a price above $36. Shares of BAC are flat in early trading.

Shares of apparel and athletic shoe maker Nike are sharply higher this morning after reporting earnings. NKE beat earnings estimates by 7-cents a share, reporting EPS of $1.07. However, revenues did fall 11.7 percent, but this was offset by cost cutting. NKE shares are up more than 7 percent at a price of $64.25. The stock has a 52-week range from $38.24 to $67.44.

Though down in early trading, the Dow ($INDU) could set a record point gain for the third quarter. The index needs to rise 45 points to break its record point gain of 1,339 points in the fourth quarter of 1998. Both the S&P 500 ($SPX) and Dow are on track to have their largest percentage gain since that quarter.

Jody Osborne
Senior Staff Writer & Options Strategist
Optionetics.com ~ Your Options Education Site