US stocks climbed on Friday as an unexpected rise in July new home sales calmed worries about the housing market slump, helping investors put aside fears about a recession. But gains were limited by a drop in financial stocks as concerns remain about the subprime mortgage market's problems.
On Thursday, stocks fell after the CEO of Countrywide Financial Corp, the biggest US mortgage company, said the persistent downturn in the US housing market could lead to a recession.
The Dow Jones industrial average was up 68.77 points, or 0.52 percent, at 13,304.65. The Standard & Poor's 500 Index was up 7.72 points, or 0.53 percent, at 1,470.22. The Nasdaq Composite Index was up 14.96 points, or 0.59 percent, at 2,556.66.