Volatile session ends in negative territory, but the third quarter went to the bulls. On Wednesday, the Dow ($INDU) fell 29.92 points to a level of 9,712.28. The S&P 500 ($SPX) lost 3.53 points to 1,057.08. The Nasdaq ($COMPQ) gave up 1.62 points to 2,122.42. Volumes were heavier on the session with the NYSE trading 1.77 billion shares and the Naz turning over 2.66 billion shares. Market breadth was negative by a 13-to-18 and 10-to-17 margin on the Big Board and Naz respectively.

Shares fell out of the gate Wednesday with mixed economic news getting attention. However, by the afternoon session, the bulls had clawed their way back to positive territory, but these gains couldn't hold into the close. Data on GDP was better than expected, but the Chicago PMI and ADP Employment report were disappointing. Nonetheless, the major market indices all saw gains close to 15 percent in the third quarter, which is the best move since the fourth quarter of 1998. Even September, which is normally a bearish month, saw strong gains for stocks with the Dow up 2.27 percent, while the SPX rose 3.57 percent and the Naz tacked on 5.64 percent.

The Chicago PMI provided incentive to sell early in the session when this measure of business activity fell back into contraction territory. The index fell to 46.1 in September from 50.0 in August and below expectations for a reading of 52.0. This raised some concerns about Thursday's ISM Mfg. Survey release. Expectations are for the ISM to rise slightly to 53.5 from 52.9 in August.

The ADP Employment report showed that 254,000 private payrolls were lost in September, which was below the 298,000 decline in August, but still worse than expected. This report does not show the change in government jobs like the BLS report, but it can provide some idea of what to expect from the employment report. Economists are looking for 170,000 nonfarm payrolls to be lost in September, improving from August when 216,000 payrolls were lost.

Shares of Nike (NKE) outperformed Wednesday after the company reported earnings last night. The apparel and athletic shoe maker beat earnings estimates, though revenues did decline in almost all its regions. Cost cutting benefited the bottom line and this convinced traders to buy the stock, which rose 7.57 percent to $64.64 Wednesday.

Another big winner on the session was Ameriprise Financial (AMP), which rose 12.34 percent to $36.33. The company benefited from news it will buy the asset management unit of Bank of America (BAC) for about $1 billion in cash. Shares of BAC fell 1.4 percent to $16.92.

Thursday's session will be highlighted by further economic news with the ISM Mfg. Survey, personal income and outlays and jobless claims all on tap. However, trading volumes could be light as traders await the employment report Friday morning.

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