Stock indexes rose on Friday to fresh 2009 highs, as better-than-expected U.S. existing home sales and positive economic surveys in Europe added to optimism the economy was on the mend.
Comments from Federal Reserve Chairman Ben Bernanke, who said the global economy appears to be recovering after a deep downturn, also supported the view that the recession was waning.
The S&P 500 and the Nasdaq hit 10-month intraday highs, while the Dow industrials rose to their highest levels in nine months.
The housing data is really the key element for economic recovery, and because the data was a lot better than expectations, the market is reacting favorably, said Bruce Bittles, chief investment strategist at Robert W. Baird & Co in Nashville, Tennessee.
Sales of previously owned U.S. homes in July notched their fastest pace in nearly two years, an industry survey showed on Friday, the strongest sign yet that housing was pulling out of a three-year slump.
The Dow Jones home construction index gained more than 4 percent. <.DJUSHB>
The Dow Jones industrial average <.DJI> rose 134.90 points, or 1.44 percent, at 9,484.95. The Standard & Poor's 500 Index <.SPX> added 16.10 points, or 1.60 percent, at 1,023.47. The Nasdaq Composite Index <.IXIC> climbed 26.38 points, or 1.33 percent, at 2,015.60.
Also lifting stocks, purchasing managers surveys showed the German and French private sectors grew in August, a week after data indicated the European heavy-weights pulled out of recession in the second quarter.
Big manufacturers and oil majors led the Dow industrials higher as oil touched a high for this year above $74 per barrel and metal prices surged.
Exxon Mobil Corp
(Additional reporting by Angela Moon; Editing by Padraic Cassidy)