Growth in service industry gives stocks a boost

Reassuring signs on employment and growth in the service industry got the stock market back on an upward trajectory Wednesday.

Major indexes rose after payroll company ADP said private employers increased hiring last month and a service sector index rose unexpectedly in July. The Dow Jones industrial average gained 44 points.

Investors were relieved that the two reports provided no signs that the economy might be headed back into recession, even though growth might be sluggish.

Traders have grappled with earnings and economic reports at odds with each other in recent weeks that provide a mixed picture about the pace of the recovery.

The latest batch of earnings were largely better than expected, continuing a trend that has been seen during the past four weeks.

Despite the upbeat earnings and better-than-expected economic reports, many investors remain tentative ahead of the Labor Department's monthly employment report due Friday.

"ADP was positive, but when all is said and done, the market needs stronger confirmation to grind higher," said Quincy Krosby, Prudential Financial's market analyst.

The Dow Jones industrial average rose 44.05, or 0.4 percent, to 10,680.43. The Standard & Poor's 500 index rose 6.78, or 0.6 percent, to 1,127.24, while the Nasdaq composite index rose 20.05, or 0.9 percent, to 2,303.57.

- AP