US stocks ended their calmest week in a month with a big advance Friday, rising on solid economic readings that countered the bleak sentiment that has blanketed the financial markets. The Dow Jones industrial average rose more than 140 points in a lightly traded session.
Stocks started out flat but jumped following a stronger-than-expected reading on new homes sales for July. That report came after a reading showing orders to factories for big-ticket goods rose sharply last month.
The Dow rose 142.99, or 1.08 percent, closing at 13,378.87.
Broader stock indicators also advanced sharply. The Standard & Poor's 500 index rose 16.87, or 1.15%, to 1,479.37. The Nasdaq composite index rose 34.99, or 1.38%, to 2,576.69.
For the week, the Dow rose 2.29%, its biggest point gain since the week ended April 20. The blue chips now sit about 622 points, or 4.7%, below their July 19 record close.
The S&P 500 and the Nasdaq saw their biggest weekly point gains since the week ended March 23. The S&P rose 2.31%, and the Nasdaq added 2.86%.
Bonds had a big week. Investors initially nervous about seemingly any form of risk fled some commercial paper, the bonds that companies sell to get quick cash, and shoehorned into safer short-term Treasurys. As the week continued, they gradually ventured back into longer-duration securities and stocks.
Bonds rose Friday, with the yield on the benchmark 10-year Treasury note falling to 4.62% from 4.63% late Thursday
In economic news, the Commerce Department said new home sales rose 2.8% in July, after falling 4% in June. A second report showed that orders for durable goods - those expected to last at least three years - jumped 5.9% in July, the biggest increase in 10 months.
The main stock indices ended mixed, with investors balancing news that BNP Paribas was reopening three frozen funds against a top lender's warning of US recession.
The UK FTSE 100 index gained 0.4% to 6,220.10 and the French CAC 40 rose 0.8% to 5,569.38, while the German DAX 30 index declined 0.06% to 7,507.27.
Stocks fell in most markets as traders locked in profits before the weekend due to lingering concerns about US housing loan problems.
Japan's benchmark Nikkei 225 stock index fell 67.35 points, or 0.41%, to finish at 16,248.97 in thin trading on the Tokyo Stock Exchange.
The euro and the pound moved higher against the US dollar on Friday with traders bidding the currencies up with an eye toward a possible cut in US interest rates.
The 13-nation euro bought US$1.3595 in morning European trading, up from the US$1.3557 it bought in New York late Thursday while the British pound reached US$2.0046 compared with US$2.0029 the night before.
The dollar edged higher against the Japanese currency, rising to 115.95 yen from 115.92 a day after Japan's central bank left its own interest rate unchanged at half a percent.
Major commodities markets moved higher, with energy and metals prices supported by newly positive data on home sales and factory orders.
Oil prices jumped above $70 a barrel. Gold prices rose solidly, underpinned by a weaker US dollar, while agriculture futures finished in mixed range.
December gold picked up $9.10 to $677.50 an ounce at the close of the Nymex. December silver rose 30 cents to $12.098 an ounce.
Elsewhere on the Nymex, energy prices climbed, helped by Wall Street's positive finish on Friday and the day's upbeat economic data. JPMorgan analysts said in a report Friday, "This week's stability in the equity market quelled concerns over subprime-mortgage slowing the global economy and cutting energy demand."
Oil and gasoline prices also jumped on reports that Chevron Corp. had declared force majeure on purchases of some crude oil for a Pascagoula, Mississippi, refinery that suffered a fire last week. Chevron did not confirm that specifically, but said the company's refinery is running less crude and that "we are working closely with our crude suppliers and expect some crude shipments may be canceled or rerouted to other refineries in our global network." The 330,000-barrel-a-day Pascagoula refinery has been running at partial capacity since the fire.
Force majeure protects a company from contractual liability in the face of natural or unexpected disasters.
Light, sweet crude for October delivery jumped $1.26 cents to settle at $71.09 a barrel, while September gasoline futures added 5.82 cents to $1.9814 a gallon.
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