Stock Market News for August 5, 2010

A private sector payrolls report fueled some optimism ahead of Friday’s important monthly jobs report, sending stocks higher Wednesday. Investors also welcomed a better-than-expected rise in a service industry index that helped ease concerns, albeit temporarily, about the strength of the economic recovery. Priceline.com Inc. and Time Warner’s strong earnings numbers also helped sentiments.

The Dow Joes industrial average rose 44 points, or 0.4%, to 10,680. The S&P 500 index added nearly 7 points, or 0.6%, to 1,127.24, while the tech-heavy Nasdaq composite index jumped 20 points, or 0.9%, to 2,303.57.  On the New York Stock Exchange, advancing shares beat those that fell in price by a three to one margin as less than one billion shares exchanged hands.

Payroll processor ADP’s monthly jobs report, often considered a precursor to the Bureau of Labor Statistics’ comprehensive monthly jobs data, said private employers added 42,000 jobs in July, above expectations. Given the relationship between employment and consumer spending, the report encouraged investors who were increasingly getting used to upbeat corporate earnings.

Investors bid Priceline.com’s (NASDAQ:PCLN) shares up 22% after the firm reported estimate-beating numbers that indicated increased travel activity.  Polo Ralph Lauren (NYSE:RL) raised its guidance for the year and CBS (NYSE:CBS) said advertising demand is strengthening.

The CBOE Vix, considered to be the best gauge of market’s volatility, eased 1.9% to 22.21. The US dollar increased 0.4% against a basket of foreign currencies, climbing from 8-month lows against the yen, and gaining against the euro.

All ten S&P500 industry sectors, excluding telecommunication shares, marked gains on the day.  Telecom shares ended the session flat.  Basic material, healthcare and consumer service shares, up 1.1%, led on the upside. Industrials (+0.8%), oil and gas (+0.7%), technology (+0.6%), financials (+0.3%), and utilities (+0.2%) followed.

Shares in Goldman Sachs (NYSE:GS) jumped 2.1% on reports the firm is planning a partial spinoff of its proprietary business. Banking analyst Dick Bove saw significant merit in Goldman's move. However, analyst Meredith Whitney offered a grim outlook for financials, noting the poor revenue growth plaguing US banks is likely to continue at least into next year.

Besides key earnings reports, the day sees major retailers' July same-store-sales results. Costco (NASDAQ:COST) kicked off the summer results with a better-than-expected 6% gain in same-store sales, beating projections of 5.5% jump. There are expectations summer heat pushed up monthly sales as stores offered clearance discounts to move inventory in front of the key back-to-school season.

Among key names, Cigna (NYSE:CI), Cardinal Health (NYSE:CAH), DJIA component Kraft (NYSE:KFT), Playboy Enterprises (NYSE:PLA) and Barclay's Bank (NYSE:BCS) report their earnings.

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