US STOCKS-Wonderful world of Disney earnings surprise boosts Wall Street

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* U.S. services sector activity hits 16-month high in July
* Biggest daily pct gain for Disney since late March
* Energy stocks gain as oil prices jump
* Dow up 1.39%, S&P 500 up 0.64%, Nasdaq up 0.52%

(New throughout, adds official closing prices, trading volume
data)
By Chuck Mikolajczak
NEW YORK, Aug 5 (Reuters) - U.S. stocks climbed on Wednesday
on the heels of a surprise quarterly profit from Disney and as
investors stayed optimistic that a deal was near for a U.S.
coronavirus fiscal aid package.
Walt Disney Co's DIS.N shares jumped 8.80%, to put it
among the biggest boosts to the S&P 500 and Dow. The stock
notched its biggest daily percentage gain since March 24 as
revenue declines for Disney parks and media networks were not as
bad as feared. "That is helping the Dow and that has been a laggard versus
the S&P this year, but it is more than that," said Willie
Delwiche, investment strategist at Baird in Milwaukee. "At a
time when everyone is talking about how big and how important
these megacaps are to the S&P, kind of quietly you are starting
to see a little bit of a leadership rotation."
The Dow Jones Industrial Average .DJI rose 373.05 points,
or 1.39%, to 27,201.52, the S&P 500 .SPX gained 21.26 points,
or 0.64%, to 3,327.77 and the Nasdaq Composite .IXIC added
57.23 points, or 0.52%, to 10,998.40.
Square Inc SQ.N surged 7.10% after the payments processor
reported a 64% rise in second-quarter revenue, as consumers
increased online buying and used its peer-to-peer Cash App
platform during the pandemic. As quarterly results have come in better-than-feared and
heavyweight technology and technology-related companies have
surged, a heavy dose of fiscal and monetary stimulus have helped
fuel a rally in equities to bring the S&P 500 to less than 2%
from its closing record on Feb. 19.
With 384 companies in the S&P having reported earnings
through Wednesday morning, results are coming in 23.5% above
expectations, in aggregate, according to Refinitiv data, the
highest on record back to 1994.
Economic data painted a mixed picture, as U.S. services
industry activity gained momentum in July, according to an ISM
survey, with new orders jumping to a record high. However,
hiring declined, supporting views that a recovery in the labor
market was faltering.
Earlier, the ADP National Employment Report, which can be an
inconsistent precursor to the government payrolls report set for
Friday, showed U.S. private employers hired far fewer workers
than expected last month. "We know we had this tremendous rebound off the lows but
what we need now is sustained strength," said Delwiche.
Friday is being viewed as a deadline by one of the lead
negotiators for the White House and some Senate Republicans in
talks with congressional Democrats on a fresh round of
coronavirus aid, or talks will be scrapped. Financials .SPSY , industrials .SPLRCI and materials
.SPLRCM , that track economic growth, outperformed among the
major S&P sectors.
Teladoc Health Inc TDOC.N fell 19.01% after agreeing to
buy chronic care provider Livongo Health Inc LVGO.O in a deal
valuing the company at $18.5 billion, betting on a boom in
online care and consultations spurred by the coronavirus crisis.
Livongo shares fell 11.40%. Electric truck maker Nikola Corp NKLA.O slumped 9.81%
after it reported a bigger quarterly loss in its first results
as a listed entity. Advancing issues outnumbered declining ones on the NYSE by a
2.47-to-1 ratio; on Nasdaq, a 2.14-to-1 ratio favored advancers.
The S&P 500 posted 50 new 52-week highs and no new lows; the
Nasdaq Composite recorded 208 new highs and 10 new lows.
About 10.09 billion shares changed hands in U.S. exchanges,
compared with the 10.43 billion daily average over the last 20
sessions.