Automatic Data Processing Inc. (ADP), which I first wrote about on May 8, 2009, at a price of $36.84, is doing battle with major, psychological resistance at $50, but the view from here argues the uptrend is stronger and should prevail. Here's why:

Look for ADP's FY2011 revenue to increase 4% to 7% on better-than-expected U.S. monthly job growth and business formation. A 4% to 6% revenue rise is likely in FY2012.

In a breakthrough on the jobs front, the U.S. added 93,000 private sector jobs from October to November, according to the latest ADP National Employment Report released today. The previous month's report was revised upward to 82,000 from 43,000.

November's gain was the largest private sector rise in three years. It is also the tenth month in which job growth has exceeded 47,000.

By sectors, gains were as follows:

Automatic Data Processing's (ADP) September private sector employment report -- which came in at a worse-than-expected loss of 39,000 jobs -- is not a data point that investors should ignore. That said, investors need to retain a proper perspective regarding the metric.

Institutional investors, public policy makers, and economists monitor the ADP report primarily because it's the last, monthly, national job tally before the U.S. Department of Labor's monthly, non-farm, payroll report -- the nation's best and most comprehensive survey of labor market conditions, called the Employment Situation.

According to the ADP National Employment Report, US businesses cut 39,000 jobs in September, as reported in the Financial Times.

We've heard for weeks that the economy was slowing. Now for the first time in eight months, U.S. businesses shed jobs. Jobs in the private sector are the backbone of economic growth. This is where new jobs are created. Businesses are holding pat, not risking new hires. What this means is that at the business to business level, there simply are not that many new orders.

Alcoa (AA), Marriott (MAR) and Yum! Brands (YUM) kick off the new earnings season this week. Analysts surveyed by Thomson Reuters are looking for moderate year-over-year earnings and revenue growth in the third quarter from each of these dividend payers.

Note that Marriott and Yum! Brands have exceeded consensus estimates in recent quarters and have First Call consensus buy recommendations as well. They are also trading near their 52-week highs, while Alcoa shares are closer to the 52-week low despite a 22% rise in the past three months.

Automatic Data Processing (ADP), which I first wrote about on May 8, 2009, at a price of $36.84, continues to meander at/near $40, but I still like the shares at this juncture. Here's why:

Look for ADP's FY2011 revenue to increase 2% to 3%, collared by to-date lower-than-expected U.S. monthly job growth and business formation.

Longer-term, the payroll out-sourcing market has ample room for market share gains and the mining of new client theaters, especially small/medium-sized businesses, also is appealing. International business opportunities and a strong balance sheet further supports the favorable view. A better-than-decent annual dividend of $1.36 adds to the positive story.

"We believe that high-quality stocks purchased at historically low-price-to-high-yield offers the best potential for downside protection and upside appreciation," says dividend specialist Kelley Wright.

The editor of Investment Quality Trends explains, "Here we look at three blue chip stocks that have earned our top designation for outstanding dividend growth: IBM (IBM), Automated Data Processing (ADP) and Abbott Laboratories (ABT).

Here is a common sentiment about the stock market: "No fun at all. As I have said before, I believe it has turned into one big casino largely divorced from its original goal of providing capital to companies who produce something of value."

There's a lot of truth to what "granny" recently said to me in an e-mail. Fortunately she also noted "FYI Granny's up 5.86% + dividends." That would give her a gain of about 10% in the past ten months since I posted Where should granny put $50,000, suggesting a very conservative portfolio for an uncertain time.

Not only has she earned a very nice return, surpassing her CD account by 9.5% (20 fold), but she was able to do so with a great deal less volatility than the overall market most of us have lived through.

So, how is that Summer of Recovery working out? Following Tuesday's drop, the market was slightly lower Wednesday morning thanks in part to the ADP payroll report. According to the report, employers added 13,000 jobs in June, falling short of the consensus estimate for 60,000 jobs. This data looks at private-sector jobs only and suggests that payroll gains were tame in June thanks to small businesses that were cutting jobs.

All of Wednesday morning's news wasn't bad, as the European Central Bank (ECB) offer of three-month funds came in short of expectations. This data means that the region's banks may not be as ECB-dependent as some thought. In addition, the financial sector is prospering as the exposure to European banks was made to appear a bit less toxic. Furthermore, Democrats in Congress decided to take a bank tax off the table in the new financial overhaul bill. This move has helped bring Republicans on board and makes the bill look like it may pass.

According to ADP, U.S. companies hired 55,000 additional workers in May, which marked the fourth straight increase in private-sector jobs. According to the data, service-producing industries added 78,000 jobs and goods-producing industries lost 23,000 jobs.

The ADP report is bolstering bulls on the Street a day ahead of the release of nonfarm payroll data and the unemployment rate. My concern is that expectations called for an increase of 100,000 jobs added in May. By my University of Cincinnati math, the data came in worse than expected by some 45,000 jobs.

"Fear is back and it can be seen in the internals. So what is one to do? What we always do: identify quality, establish value, and take advantage of opportunity when it presents itself," suggests Kelley Wright.

The editor of Investment Quality Trends -- an advisory service that assesses blue chip stocks by analyzing their historic dividend yield levels -- adds, "While all ships go out with the tide, value is eventually rewarded. Remember, we are in this for the long haul.

"Our current Timely Ten -- featured below -- is our reasoned expectation based on our methodology and experience for what we believe will perform best over the next five years. Do we believe that all 10 will go up simultaneously or immediately? Of course not.