US markets rally on home sales report

US markets jumped on Friday as surprisingly strong data on home sales and durable goods orders relieved anxiety about the economy and bolstered investor 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 Mobil Corp, which benefited from a 2 per cent surge in oil prices. Sales of new U.S. homes in July rose 2.8 per cent, reversing two months of declines and a report show ed new orders for durable goods, which are long-lasting U.S.-made products, soared in the same period.

The Dow Jones industrial average shot up 142.99 points, or 1.08 per cent, to end at 13,378.87. The Standard & Poor's 500 Index climbed 16.87 points, or 1.15 per cent, to finish at 1,479.37. The Nasdaq Composite Index rose 34.99 points, or 1.38 per cent, to close at 2,576.69.