Stocks rallied for a fourth straight session Friday, ending at their highest closing levels since the fall, after a sharp jump in existing-home sales.
Existing-home sales surged 7.2 percent to a 5.24 million annual pace, the highest jump since August 2007. Economists had expected a rise of just 2.2 percent. Home sales were up 5 percent year over year. It was the fourth straight month sales have risen.
The Dow Jones Industrial Average shot up 155.91, or 1.7 percent, to close at 9,505.96, bringing its total for the four-day rally to 4.1 percent. It was the highest close for the Dow since November.
The S&P 500 jumped 1.9 percent and the Nasdaq advanced 1.6 percent, delivering them their highest closes since October.
Federal Reserve Chairman Ben Bernanke spoke today, saying the economy is on the mend but recovery is likely to be sluggish and risks still remain.
"After contracting sharply over the past year, economic activity appears to be leveling out, both in the United States and abroad, and the prospects for a return to growth in the near term appear good," Bernanke said in remarks prepared for delivery to an annual Fed conference in Jackson Hole, Wyoming.
Asian stocks closed mostly lower, but China's Shanghai Composite Index managed to build on Thursday’s gains with a 1.7 percent rise.
The week started off with a 2-percent drop, prompting talk that this might be the correction everyone has been expecting, given that the S&P 500 has gained more than 50 percent since its March low. The buzz was that the correction could be as much as 10 percent. But stocks rebounded Tuesday and just kept going.
For the week, the ExxonMobil had the most positive impact on the Dow, up about 2.5 percent, as crude rallied to new highs for the year above $74 a barrel. Crude settled at $73.89 a barrel.
Still, American Express is the Dow's biggest gainer year to date, up more than 77 percent.
Alcoa was the biggest decliner on the Dow this week, down more than 5 percent. Year-to-date, that title goes to Procter & Gamble , which is down more than 13 percent.
In Friday's action:
AIG shares rose 1.7 percent after the troubled insurerwon dismissal of a $1 billion workers' compensation lawsuit.
Morgan Stanley rose 1.1 percent folllowing news the brokerage is planning a hiring spree for up to 400 traders and salespeople as the investment bank looks to pull out of its string of quarterly losses.
Bank stocks finished strongly higher. Bank of America gained 1.9 percent and Citigroup jumped 4.9 percent.
Gap shares rose 3.3 percent after FBR raised its rating on the stock to "outperform" and both FBR and Jefferies raised their price targets on the stock. This came after Gap reported earnings late Thursday.
Starbucks made a move that sums up the economy right now: It's lowering the prices on some of its basic drinks like small coffees and lattes but raising the price on some of its larger, more complex drinks. Its shares gained 2.6 percent.
Eric Claus, CEO of the supermarket chain A&P , said the stock market has gotten ahead of the consumer. Its shares climbed 3.3 percent.
Women's clothing chain Ann Taylor reported earnings of 6 cents a share that were better than Wall Street expectations. Its shares gained 4.8 percent.
And Aeropostale shot up more than 10 percent after the teen chain reported a rise in same-store sales.
On tap for next week: More than $100 billion in Treasury auctions, a report on bailout executive pay, durable-goods orders, new-home sales, the second reading on second-quarter GDP, personal income and spending, consumer confidence and spending, and earnings from Dell and Tiffany.
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