U.S. Stocks Rise, Sending S&P 500 to Highest Level in 10 Months

U.S. stocks rose for the fifth time in six weeks, sending the Standard & Poor’s 500 Index to the highest level since October, as rising commodity prices and a surge in home sales signaled an economic recovery.

Exxon Mobil Corp. gained as oil climbed to a 10-month high of $73.89 a barrel. JPMorgan Chase & Co. rallied for the seventh straight week after data showed sales of existing U.S. homes jumped 7.2 percent. Pfizer Inc. and Merck & Co. rose amid opposition to President Barack Obama’s health-care reform proposal. American International Group Inc. soared 35 percent after saying it expects to repay the government.

The S&P 500 rose 2.2 percent to 1,026.13 this week. The Dow Jones Industrial Average added 184.56 points, or 2 percent, to 9,505.96. The Nasdaq Composite Index increased 1.8 percent to 2,020.90.

“We have seen the worst of the economic environment,” said Hayes Miller, a Boston-based money manager at Baring Asset Management Inc., which manages $38 billion. “Nobody is worried about equity prices being expensive.”

Stocks have rallied during the past five months, driving the S&P 500 up 52 percent, as corporate profits and the economy improved. U.S. existing home sales rose to highest level in almost two years in July, the National Association of Realtors said yesterday, adding to evidence that the economy is recovering faster than analysts projected.

Highest Proportion

More than 72 percent of S&P 500 companies beat the average estimate for second-quarter profit, the biggest proportion since Bloomberg began tracking the data in 1993. Gross domestic product shrank at a less-than-projected 1 percent annual rate in during the period. The Conference Board’s index of leading economic indicators has risen four straight months.

Exxon Mobil, the second-largest publicly traded oil producer in the world, rose 2.5 percent to $69.92, leading energy companies in the S&P 500 to a 3.2 percent gain. Chevron Corp., the second-largest U.S. oil company, added 1.6 percent to $69.73. Crude oil climbed to $73.89 a barrel.