NEW YORK: The stock market has ended a strong third quarter with trading that reflected investors' mixed emotions about the U.S. economy.
The major indexes closed slightly lower after zigzagging through the day.
Prices got a lift from the government's latest reading on the gross domestic product, then plunged on news of a surprise drop in Midwestern manufacturing.
The Dow Jones industrial average ended down 30 points as investors remained uneasy about economic data and shifted bets as the dollar strengthened. The drop shaved only a modest amount from the Dow's 15 percent gain for the July-September period, its strongest quarter in 11 years.
The day's slide-and-bounce performance was a fitting one for the end of the quarter. When bad news hits the market, reminding investors of the economy's fragility, stocks slide.
But within a few days, or even the same day, they start to recover as investors seem to grab hold of the fact that no one expects the recovery, or stocks, to have an unbroken path upward.
"Any legitimate decline in the market is just seen as a buying opportunity," said David Waddell, senior investment strategist and CEO of Waddell & Assoc.
"That pattern has continued now ever since the rally began."
The slide that pulled the Dow down by more than 100 points in early trading began when the Chicago Purchasing Managers Index came in weaker than expected.
Investors worried that the drop meant the national Institute for Supply Management index due Thursday also would be weak.
Not all the news rattled investors.
The Commerce Department said the economy didn't sink as fast in the second quarter as it had estimated.
The gross domestic product, which is the broadest measure of the economy, slid at a pace of 0.7 percent, rather than 1 percent as it had projected.
Stocks pulled off their lows as the dollar weakened.
That makes U.S. goods cheaper to overseas customers and is seen as a boost for the U.S. economy.
Occasional squalls are to be expected after the quarter the stock market has seen.
The Dow's gain was its biggest since a surge of 17.1 percent in the final quarter of 1998, when the dot-com bubble was still inflating.
The rise was even stronger than the 11 percent jump the Dow logged from April-June.
The Dow ended down 29.92, or 0.3 percent, at 9,712.28 after falling as much as 134 points. The broader S&P 500 index fell 3.53, or 0.3 percent, to 1,057.08. It rose 15 percent for the quarter after gaining 15.2 percent in the previous quarter. The index, which is the basis for many mutual funds, is up 56.3 percent since hitting a 12-year low in March. The Nasdaq composite index fell 1.62, or 0.1 percent, to 2,122.42. It rose 15.7 percent for the quarter. The Russell 2000 index of smaller companies fell 6.17, or 1 percent, to 604.28. Three stocks fell for every two that rose on the New York Stock Exchange, where volume came to 1.8 billion shares compared with 1.3 billion shares traded at the same point Tuesday.
The broader S&P 500 index fell 3.53, or 0.3 percent, to 1,057.08. It rose 15 percent for the quarter after gaining 15.2 percent in the previous quarter.
The index, which is the basis for many mutual funds, is up 56.3 percent since hitting a 12-year low in March.
The Nasdaq composite index fell 1.62, or 0.1 percent, to 2,122.42. It rose 15.7 percent for the quarter.
The Russell 2000 index of smaller companies fell 6.17, or 1 percent, to 604.28.
Investors were uneasy ahead of Friday's September employment report from the Labor Department.
A snapshot Wednesday on employment showed some modest improvement in the labor market.
The ADP National Employment Report found that private sector employment fell by 254,000 in September following a revised loss of 277,000 jobs in August.
It was the fewest jobs lost since July 2008.
Traders are waiting to see whether there will be a significant drop in the number of jobs cut nationwide during September.
The market could have trouble continuing its advance if economic reports don't boost optimism.
Steve Hagenbuckle, managing principal for TerraCap Partners in New York, expects that corporate earnings will likely exceed expectations again in the third quarter and help boost the market.
"The corporate numbers will continue to be met or exceeded so I think we'll continue to run up," he said.
But many investors have doubts.
The latest weekly survey by the American Association of Individual Investors found that bearishness among investors stood at 44.5 percent, above the long-term average of 30 percent.
As a result, many investors are still paddling to safer investments.
In August, investors funneled $42.9 billion into bond funds and only $3.9 billion into stock funds, according to the Investment Company Institute, the mutual fund trade group.
The stock market often rewards the contrarian so many analysts see investors' doubts as one of the strongest signals that the rally will continue.
Some of the hardest-hit stocks in the market's slide that intensified a year ago posted spectacular gains in the third quarter.
Financial stocks led the 10 industry groups that make up the Standard & Poor's 500 index with a gain of 25 percent.
Industrials rose about 21 percent, as did materials companies like chemical producers and paper makers.
Some stocks logged enormous advances for the quarter.
Newspaper publisher Gannett Inc. surged 250 percent, while Hartford Financial Services Group Inc. jumped 123 percent.
There were exceptions. Commercial lender CIT Group Inc. tumbled 43.7 percent as investors worried about its stability.
Sprint Nextel Corp. slid 17.9 percent. Meanwhile, bond prices were little changed Wednesday.
The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.31 percent from 3.29 percent late Tuesday. - AP
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