What happened

BlackRock (BLK -0.50%) shares gained ground Thursday following the morning release of its third-quarter report. The stock fell by some 5.2% at the opening bell, but then surged higher throughout the day, and was up 6.6% at the closing bell to $566 per share. BlackRock is still down 38% year to date.

Though they dropped initially, all of the major U.S. indexes ended Thursday's session higher, with the S&P 500 up 93 points (2.6%), the Dow Jones Industrial Average up 828 points (2.8%), and the Nasdaq Composite up 232 points (2.2%).

So what

BlackRock's third-quarter results were a mixed bag. The world's largest investment manager beat earnings estimates, but it fell short of revenue estimates. Its net income of $1.4 billion ($9.25 per share) was down 16% year over year. However, that topped earnings estimates. Revenue was down 15% to $4.3 billion, but that was shy of the $4.4 billion consensus forecast.

The company had $65 billion in long-term net inflows (excluding money market funds) in the quarter and $248 billion through the first three quarters of the year. Bond exchange-traded funds (ETFs) accounted for $37 billion in inflows in the quarter, while actively managed institutional equity funds had $71 billion in inflows, offsetting net outflows in retail funds and institutional index funds. ETFs overall had $22 billion in net inflows.

Total assets under management dropped by roughly 6% to $7.96 trillion. The overall revenue declines were the result of lower asset totals, which resulted in lower management fees. That revenue reduction was offset by a 10.6% decline in overall expenses, which helped the company beat earnings estimates.

Now what

BlackRock is going to go as the market goes, for the most part, so an environment in which the major benchmark indexes are down 20% or more is not going to be good for it.

But after a disappointing inflation report sent share prices lower early in Thursday's session, the market rallied. Inflation ticked up 0.4% in September over August and was up by 8.2% from September of last year.

This will almost certainly mean that the Fed will continue its aggressive pattern of interest rate hikes as it works to get inflation back in check, but some market watchers were optimistic that the September Consumer Price Index gain could have been the peak.

Also, some analysts, including Ari Wald, head of technical analysis at Oppenheimer, are seeing signs that a bear-market bottom may be forming. On Thursday, Wald said that the fact that the Russell 2000 index has held to its June lows is a positive sign. It suggests to him that the small-cap end of the market is firming up, which is a potentially good sign for the larger market.

BlackRock is the market leader and the largest provider of ETFs. Its business is also cyclical, so when the market starts to flatten out and move upward, that will be good news for BlackRock investors.