The Coolpix 5000 has a tendency to clip highlights and for most outdoor shots a compensation of at least minus 0.3 EV is recommended. From the histogram in playback mode you can determine whether you need to compensate more or not. As mentioned in my Coolpix 5000 Second Opinion at dpreview.com and in the Dynamic Range Tutorial on this site, the best dynamic range can be achieved by combining two or more shots (see also example 6. below). However, in most cases, especially those with moving objects, we can only take one shot.
Besides reducing EV, reducing contrast and saturation can help but should be used with caution. As shown in picture 3. below, reducing contrast has much more impact on the histogram than reducing saturation. Reducing contrast will, by definition, reduce the tonal range of the histogram. If later you stretch the histogram by software, "gaps" and "combing" will appear which can lead to "posterization" if too much stretching is required. The "-1" setting in the Coolpix 5000 has about the same effect as a -0.7 to -1.0 EV reduction and is in certain situations an overkill, so that you need to undo some of the effect by increasing the EV again, as shown here. The can result in a histogram with a smaller tonal range than by just reducing the EV.
In certain situations, especially those where high EV reductions are needed to remove clipped highlights AND whereby the shadows start to become clipped instead, reducing the contrast can often, but not always, preserve more shadow detail, at the cost of a smaller tonal range, as can be seen from the histograms 3. and 5. below. I have shot hundreds of samples and the conclusion is that every situation is different, so leaving the saturation permanently to "-1" is more risky than leaving the EV at -0.3 EV. It works best of course, as one would expect, in very contrasty situations.
The histogram of 6. is clearly the best because highlights are removed, shadow detail is preserved while still maintaining a decent tonal range. It combines shot 2. as a top layer with a luminance mask, followed by shot 2. at 60% opacity and shot 1 at 100% opacity as the bottom layer.

Conclusion: contrast reduction (effect can be increased slightly by reducing saturation as well) can help to reduce clipped highlights, especially in situations where high EV reduction is needed and where it would clip the shadows. Contrast reduction should be used with caution and is certainly not a "one size fits all" setting.