U.S. stocks jumped Friday as surprisingly strong data on home sales and factory orders relieved anxiety about the economy and bolstered confidence after weeks of market turbulence.
The gains helped the S&P 500 index post its best week in five months, even with more news pointing to further turmoil in the subprime mortgage sector. Both the Dow industrials and the S&P got a big boost from energy stocks such as Exxon (XOM), which benefited from a 2 percent surge in oil prices.
The Dow Jones industrial average was up 142.99 points, or 1.08 percent, at 13,378.87. The Standard & Poor's 500 Index was up 16.87 points, or 1.15 percent, at 1,479.37. The Nasdaq Composite Index was up 34.99 points, or 1.38 percent, at 2,576.69.
For the week, the S&P 500 was up 2.3 percent, its best weekly percentage gain since March 25. The Nasdaq was up 2.9 percent -- also its best week since March 25 -- and the Dow was up 2.3 percent -- its best week since April 22.
Sales of new U.S. homes in July rose 2.8 percent, reversing two months of declines and a report showed new orders for long-lasting U.S.-made products, or durable goods, surged in the same period.
Technology shares, among stocks that get hit when economic worries rise, ranked among Friday's top gainers, with Apple Inc. (AAPL) the Nasdaq's No. 1 advancer.
"It's a late-summer Friday move. We had an extremely light day of volume, and the market started reversing a little bit of its overnight decline with the durable goods this morning and new home sales were certainly better than people's negative expectations," said Michael James, senior trader at regional investment bank Wedbush Morgan, in Los Angeles.
"A better tone to start the day kind of snowballed as things went on," James said.
All 10 S&P sectors ended higher for the day, led by energy.Exxon Mobil Corp. rose 2.3 percent to $85.69. U.S. crude futures rose $1.26 to settle at $71.09 per barrel.
Friday's trading volume was light, with just 1.19 billion shares changing hands on the New York Stock Exchange, well below last year's estimated daily average of 1.84 billion. On Nasdaq, about 1.66 billion shares traded versus last year's daily average of 2.02 billion.
Advancing stocks outnumbered declining ones by a ratio of more than 3 to 1 on the NYSE and by 2 to 1 on Nasdaq. Apple shares, which on Thursday topped the Nasdaq's decliners, rose 3.2 percent to close at $135.30.
Shares of big manufacturers, which tend to do well in a stronger economy, advanced. Boeing Co. (BA) shot up 1.8 percent to $98.47 on the NYSE.
Sales of new U.S. homes unexpectedly rose 2.8 percent to an annual pace of 870,000 in July, reversing two months of declines, and inventories eased, a Commerce Department report showed on Friday. The Dow Jones U.S. home builder index rose 0.4 percent to end at 434.91.
Earlier, a report showed new orders for long-lasting U.S.-made goods surged much more than expected in July, for the biggest gain in durable goods orders since September. Durable goods include washing machines, refrigerators and other big-ticket products meant to last three years or more.
On Thursday, stocks fell after the CEO of Countrywide Financial Corp, (CFC) the biggest U.S. mortgage company, said the persistent downturn in the U.S. housing market could lead to a recession.
Early on Friday, four of Asia's biggest banks, including the commercial, but state-run Bank of China, revealed bigger-than-expected exposure to U.S. subprime loans.