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Wall Street climbed steadily higher on Wednesday as the bulls cheered new signs the U.S. economy may not be slowing down as much as some had feared.

Today’s Markets

The Dow Jones Industrial Average rose 44.05 points, or 0.41%, to 10680.43, the Standard & Poor's 500 added 6.78 points, or 0.61%, to 1127.24 and the Nasdaq Composite picked up 20.05 points, or 0.88%, to 2303.57. The FOX 50 gained 2.20 points, or 0.27%, to 814.27.

The markets' economic fears were soothed by a pair of new economic reports revealing the private sector created more jobs in July than was previously expected and service-sector activity unexpectedly accelerated last month. Combined, the indicators helped quiet concerns that the U.S. will suffer to double-dip recession.

“I would characterize it as a cautiously optimistic tone with confidence edging higher as we move into the critically-important jobs report on Friday,” said Craig Peckham, equity trading strategist at Jefferies & Co. “The market is really struggling to figure out how much to commit to the long side ahead of that jobs number.”

Wall Street managed to overcome a mid-morning selloff triggered by a new report indicating China wants its banks to brace for home prices to plunge by as much as 60%, reinforcing worries of a massive housing bubble there. Instead, the markets focused on the upbeat data and on a slew of mostly upbeat quarterly results from major companies, including Toyota (NYSE:TM), Time Warner (NYSE:TWX) and Garmin (GRMN:NASDAQ).

Most of the Dow's 30 components made headway on the day, led by DuPont (NYSE:DD), Walt Disney (NYSE:DIS) and Kraft (NYSE:KFT). The index's worst performers were tech giants Microsoft (NASDAQ:MSFT) and Hewlett-Packard (NYSE:HPQ). 

The modest gains come after stocks suffered a mini pullback on Tuesday amid a flurry of gloomy economic and earnings reports. However, the losses were minor when compared with Monday’s 208-point surge on the Dow.

Wall Street hit session highs after the Institute for Supply Management said its service-sector index unexpectedly jumped in July to 54.3, compared with 53.8 in June. Economists had forecasted this key non-manufacturing index would decline to a reading of 53.1, providing another piece of evidence for the slowing economy. A reading above 50 indicates expansion. 

Worries about the labor market were lessened a bit on Wednesday by the ADP private-sector jobs report, which showed private businesses added 42,000 jobs in July. While still demonstrating sluggish job growth, the report solidly beat expectations from analysts for a gain of just 25,000 jobs.

The stronger-than-expected ADP report also sets the stage for a pair of other closely-watched labor indicators later this week: Thursday’s weekly unemployment claims report and Friday’s monthly jobs report. Economists forecast the U.S. lost 70,000 jobs in July and the unemployment rate stood rose to 9.6%.

Market sentiment was further buoyed by the latest batch of corporate results, which continue to largely exceed Wall Street’s expectations. Not only did Time Warner, Toyota and Ralph Lauren Polo (NYSE:RL) beat the Street, all three companies lifted their earnings guidance.

The bulls on Wall Street were able to wave off concerns about a Bloomberg News report saying China’s banking regulators told banks last month to conduct a new round of stress tests to brace for a drop in home prices of 50% to 60%, up from previous worst-case scenarios of just a 30% decline. The report underscores fears of a deep housing bubble in China, but also shows regulators are serious about preparing the banks in the event of a severe downturn.

The commodities complex ticked mostly higher on Wednesday. Crude oil fell 8 cents a barrel, or 0.10%, to $82.47. Copper rose 1.36% a pound to $3.4005 -- its highest settle since April 26. Gold jumped $8.50 a troy ounce, or 0.72%, to $1,193.70.

Corporate Movers

Intel (NASDAQ:INTC) said it reached a deal to settle anti-competitive charges with the Federal Trade Commission. The chip giant said it agreed to provisions to foster chip competition, including a ban on the use of threats and bundled prices. Intel also agreed to modify intellectual property agreements with Advanced Micro Devices (NYSE:AMD), Nvidia (NASDAQ:NVDA) and Via. 

BP’s (NYSE:BP) stock declined 2% even as the U.S. said it has “high confidence” no oil is leaking from the BP well that spewed millions of barrels of oil into the Gulf of Mexico. U.S. officials said the response is now moving to a restoration phase where the government will determine how to best clean up the Gulf and how much to fine the U.K. oil giant.

Toyota (NYSE:TM) swung back into the black with a fiscal first-quarter profit of Y190.47 billion, topping expectations for Y148.23 billion. The Japanese auto titan also upped its full-year operating profit forecast to Y330 billion.

Time Warner (NYSE:TWX) posted a 7.3% increase in profits and topped estimates with non-GAAP EPS of 60 cents. Analysts had been looking for EPS of just 45 cents. The parent of Time Inc. and CNN said its revenue grew by 7.7% to $6.38 billion, exceeding estimates. Time Warner also upped its 2010 non-GAAP EPS growth outlook to at least 20%, up from the mid-teens earlier.

Barnes & Noble (NYSE:BKS) surged 20% after the bookseller put itself on the block as it struggles to compete with e-books. Barnes & Noble founder and top shareholder Leonard Riggio is said to be considering a bid and other potential bidders include billionaire investor Ron Burkle. Goldman Sachs upped the stock to “neutral” from “sale” and predicted an outright sale.

Garmin’s (NASDAQ:GRMN) second-quarter profits slid 17%, but the GPS maker’s non-GAAP EPS of 85 cents easily beat the Street’s view of 73 cents. Sales jumped 8.9% to $728.8 million, topping forecasts for $677 million. However, Garmin cut its 2010 sales view to $2.8 billion to $3 billion, compared with the estimates for $2.88 billion.

PulteGroup (NYSE:PHM) posted second-quarter earnings of 20 cents a share -- the home builder’s first quarterly profit since 2006. Analysts had been projecting a loss of 1 cent a share. Revenue came in at $1.31 billion, exceeding expectations for $1.23 billion.

AOL (NYSE:AOL) swung to a second-quarter loss of $9.89 a share and suffered a steeper-than-expected 26% drop in revenue to $584.1 million. Analysts had projected revenue of $602 million. AOL took a $1.41 billion charge related to its sale of social-networking site Bebo.

Polo Ralph Lauren’s (NYSE:RL) fiscal first-quarter profits soared by 57% amid higher Asian sales and the apparel maker’s EPS of $1.21 easily beat the Street’s view of just 89 cents. Sales jumped 13.5% to $1.12 billion, coming in just shy of forecasts for $1.14 billion. Ralph Lauren also upped its full-year sales and profit outlook.

Global Markets

The U.K.'s FTSE 100 fell 0.19% to 5386.16, France's CAC 40 rose 0.35% to 3760.72 and Germany's DAX gained 0.37% to 6331.33.

In Asia, Tokyo's Nikkei 225 dropped 2.1% to 9489.34, Hong Kong's Hang Seng climbed 0.43% to 21549.90 and China's Shanghai Composite jumped 0.44% to 2638.52.