* Bernanke says global economy on the verge of recovery
* Existing home sales jump, up for 4th consecutive month
* Dow up 1.5 pct, S&P up 1.6 pct, Nasdaq up 1.3 pct
* For up-to-the-minute market news, click STXNEWS/US
(Updates to early afternoon, changes byline)
By Angela Moon
NEW YORK, Aug 21 (Reuters) - U.S. stocks surged to 2009
highs on Friday after a surprising increase in existing home
sales offered solid evidence of a recovery and positive
comments from Federal Reserve Chairman Ben Bernanke bolstered
optimism about the economy.
The S&P 500 and the Nasdaq hit 10-month intraday highs,
while the Dow industrials rose to their highest level in nine
months. The S&P is now up 51 percent from its 12-year closing
low set on March 9.
At the Fed's annual conference in Jackson Hole, Wyoming,
Bernanke gave his clearest signal yet that a recovery is at
hand, but warned that it would be sluggish for a time.
[]
"The home sales data got the market rolling, but Bernanke
really persuaded investors to (keep up) the rally," said John
Augustine, chief investment strategist at Fifth Third Asset
Management in Cincinnati.
"His comment was optimistic, but also prudent about the
quantitative easing ending sometime. But the market took it
all as good news."
The Dow Jones industrial average <> shot up 136.11
points, or 1.46 percent, to 9,486.16. The Standard & Poor's
500 Index <.SPX> rose 16.49 points, or 1.64 percent, to
1,023.86. The Nasdaq Composite Index <> gained 25.23
points, or 1.27 percent, to 2,014.45.
A surprising 7.2 percent jump in the July sales of
previously owned homes gave stocks a shot of adrenaline. It
was the fourth straight monthly increase and the highest level
of existing home sales since August 2007. []
The data drove the Dow Jones U.S. Home Construction index
<.DJUSHB> up 3.5 percent to 293.68. Among the big U.S. home
builders, D.R. Horton <DHI.N> advanced 4.1 percent to $12.74,
while Toll Brothers <TOL.N> gained 3.8 percent to $22.73.
In earnings-related news, J.M. Smucker <SJM.N> climbed 4.1
percent to $53.99 after the company reported a higher
first-quarter profit and gave a strong full-year outlook.
[] The company is known for its Smucker's brand
jellies and jams, peanut butter and ice cream toppings.
American International Group <AIG.N> shares gained 2.2
percent to $33.02. The stock rose as much as 8.4 percent
earlier in the session to an intraday high at $35.00 on news
that AIG had won dismissal of a federal lawsuit that accused
it of fraudulently shortchanging state workers' compensation
pools out of more than $1 billion. [] Its stock
price has more than doubled since the start of the month.
Energy shares also grabbed the spotlight, with U.S. crude
oil futures prices <CLc1> climbing to a 2009 high at $74.72 a
barrel. The front-month crude oil contract <CLc1> gained 98
cents, or 1.34 percent, to settle on Friday at $73.89 a barrel
on the New York Mercantile Exchange.
Chevron <CVX.N> advanced 1.5 percent to $69.62 and Exxon
Mobil <XOM.N> gained 1.7 percent to $69.74.
(Editing by Jan Paschal)
