New York  - US stocks rose sharply Friday, capping a positive week of economic and housing sector news, while the price of oil briefly reached a new high for the year.

The Dow Jones Industrial Average rose to its highest level of the year and the Standard and Poor's 500 Index reached its highest point since October.

Home resales surged an unexpected 7.2 per cent in July according to the National Association of Realtors, the best monthly gain in 10 years and a sign that the housing crisis which kicked off the wider recession is ending.

Federal Reserve Chairman Ben Bernanke said the global economy is "beginning to emerge" from its first recession since the end of World War II. The US economy also appeared to be "leveling out" and Bernanke predicted a return to growth in the near future.

Crude oil topped 74 dollars per barrel for the first time in 2009 before settling at 73.89 dollars in New York trading. Energy companies rallied more than any other group in the S&P 500.

The blue-chip Dow surged 155.91 points, or 1.67 per cent, to close at 9,505.96. The broader S&P 500 jumped 18.76 points, or 1.86 per cent, to 1,026.13. The technology-heavy Nasdaq Composite Index shot up 31.68 points, or 1.59 per cent, to 2,020.9.

On currency markets, the dollar dropped against the euro to 69.76 euro cents from 70.13 euro cents on Thursday. The dollar gained against the Japanese currency to 94.37 yen from 94.17 yen. (dpa)