YAHOO [BRIEFING.COM]: A better-than-expected ADP Employment reading and a stronger-than-expected ISM Service Index gave stocks a lift, but caution ahead of other pivotal jobs data limited gains until an afternoon bid lifted the major averages out of their trading ranges to a solid finish.

The July ADP Employment Change showed that 42,000 jobs were added to private payrolls last month. Given that the increase was greater than the 25,000 additions that had been widely expected, some hope that the official nonfarm payrolls figures will be stronger than currently forecast when they are released Friday morning. Before that, participants must digest the latest weekly initial jobless claims count, which is due tomorrow morning.

While the ADP data gave stocks a positive start this session, gains grew when the July ISM Service Index came in at 54.3, which bested the 53.0 that had been expected.

However, gains were dashed when stocks ran into resistance near the stock market's weekly high and rumors surfaced that China's regulators have requested stress tests of their banks. The alleged tests would consider a 60% decline in residential property prices. That prompted some concern about how the possibility of plummeting property prices in China would hurt the global recovery.

Though there was no real leadership to speak of, stocks fought off efforts to take them into the red. They then chopped along with modest gains before gradually climbing into the close.

Retailers outperformed with a 2.2% gain. The space was spurred higher by better-than-expected earnings and upside guidance Priceline (PCLN 281.30, +50.63) and news that Barnes & Noble (BKS 15.31, +2.47) will pursue strategic alternatives. The near 20% surge in shares of BKS helped lead both the Russell 2000 and the S&P 400 to a 1.1% gain.

For the most part, other corporate announcements had little influence on overall trade, but Goldman Sachs (GS 156.41, +3.22) garnered support for itself amid word from CNBC that the firm might spin out its prop trading arm. Some see the move as one that would promote earnings growth. As for the broader financial sector, it lagged for most of the session and finished just 0.3% higher. 

Defensive-oriented plays in the utilities and telecom sectors were also laggards. Utilities eked out a 0.1% gain, while telecom fell 0.1% to finish as the only major sector to log a loss.

Oil prices traded with little direction this session, even though oil inventories for the week ended July 30 had a larger-than-expected draw of 2.78 million barrels. The commodity traded as low as $81.62 per barrel and as high as $82.97 per barrel, a new multimonth high, but it inevitably settled pit trade with a 0.1% loss at $82.47 per barrel.

Natural gas prices came clawing back from back-to-back losses. Specifically, the commodity closed with a 2.2% gain at $4.74 per MMBtu after it fell 1.0% on Tuesday and 4.1% on Monday.

Precious metals prices diverged as gold gained 1.3% to settle at $1203 per ounce in its first close above $1200 in a week and silver prices sank 0.8% to $18.28 per ounce. DJ30 +57.75 NASDAQ +20.33 SP500 +7.89 NASDAQ Adv/Vol/Dec 1737/1.60 bln/884 NYSE Adv/Vol/Dec 2227/710 mln/781

Lacking participation kept trading volume on the NYSE below 1 billion shares. That's well below the 50-day average of 1.28 billion shares that are usually exchanged on the Big Board.

Advancing Sectors: Consumer Discretionary (+1.5%), Health Care (+0.9%), Materials (+0.8%), Industrials (+0.7%), Tech (+0.6%), Energy (+0.5%), Consumer Staples (+0.3%), Utilities (+0.1%)
Declining Sectors: Telecom (-0.1%) DJ30 +44.05 NASDAQ +20.05 NQ100 +0.9% R2K +1.1% SP400 +1.1% SP500 +6.78 NASDAQ Adv/Vol/Dec 1744/2.04 bln/868 NYSE Adv/Vol/Dec 2248/975 mln/777