Wall Street Boosted By Cabinet Pick News

Dow Jumps 500 Points On Report That Obama Plans To Name Timothy Geithner As Treasury Secretary

(CBS/AP)  Wall Street staged a comeback Friday, with the major indexes jumping more than 5 percent and the Dow Jones industrials surging nearly 500 points.

The late afternoon rally ended another volatile week that saw stocks reach six-year lows.

Stocks erased about half of the steep losses from Wednesday and Thursday, as investors got an unexpected jolt of confidence following an NBC News report that President-elect Barack Obama plans to name New York Federal Reserve President Timothy Geithner as Treasury secretary.

Investors have been looking for a clear message from Obama on who will lead his economic brain trust at a time when the country is facing its biggest financial crisis since the Great Depression. In addition, some on Wall Street have grown frustrated with outgoing Treasury Secretary Henry Paulson over his handling of the government's effort to rescue the banking system.

"Something needed to be done on the economy," said Ben Halliburton, chief investment officer at Tradition Capital Management. "The fact that they've got the team together, maybe that is going to shorten the period of indecision."

A senior Democratic official familiar with the deliberations confirmed to The Associated Press that Geithner is likely to be named as Treasury secretary. The official requested anonymity because the nomination hasn't been formally announced.

CBS News correspondent Anthony Mason said that Wall Street likes the appointment of Geithner for two reasons. First, it ends all the uncertainty and second, it provides a seamless transition.

"As head of the New York Fed, Geithner was essentially Bernanke's point man with Wall Street," Mason said. "It was Geithner who brokered the deal that saved Bear Stearns back in March."

However, Geithner's known for liking to work behind the scenes and he's never really sought out the spotlight, which could be a problem, Mason notes.

"This is the guy who's going to be the point man in leading us out of the worst economic crisis since the Depression," he said. "He will have to learn how to become a communicator."

The advance in stocks also came as the FDIC said it would guarantee up to $1.4 trillion in U.S. banks' debt for more than three years as part of the government's financial rescue plan. The directors of the Federal Deposit Insurance Corp. voted Friday to approve the plan, which is meant to break the crippling logjam in bank-to-bank lending.

Stocks fluctuated throughout most of trading Friday, as fresh concerns over the stability of the financial sector prevented the market from establishing any sustainable gains. But stocks moved sharply higher in the final half hour after the report on Geithner.

The Dow rose 494.13 points, or 6.54 percent, to settle at 8,046.42. The Standard & Poor's 500 index jumped 47.59, or 6.32 percent, to 800.03, and the Nasdaq composite advanced 68.23, or 5.18 percent, to 1,384.35.

The Russell 2000 index of smaller companies rose 21.23, or 5.51 percent, to 406.54.

Advancing issues outnumbered decliners by about 2 to 1 on the New York Stock Exchange, where volume came to 2.37 billion shares.

With the steep pullbacks earlier this week, the Dow began Friday's session down 43.1 percent this year, while the S&P 500 index - a benchmark for the overall U.S. stock market - was down 48.8 percent. The Nasdaq composite index had lost 50.4 percent this year.

And despite Friday's gains, stocks are still down sharply for the week. The Dow has lost 5.31 percent, while the S&P 500 fell 8.39 percent and the Nasdaq lost 8.74 percent. Paper losses for the week in U.S. stocks came to $1 trillion, according to the Dow Jones Wilshire 5000 Composite Index, which reflects nearly all stocks traded in America.

In the two previous days, the Dow had lost a staggering 873 points, more than 10 percent of its value, and the broader Standard & Poor's 500 index had sunk to its lowest level since 1997.

Still, Friday's rally sets up the potential for more gains going forward, analysts said.

"I think we're clearly set up for some sort of relief rally," Halliburton said. "People have been holding their breath for a relief rally for weeks. Unfortunately, most of the rallies have been short-lived."

But while the cloud of uncertainty surrounding Obama's economic team has been removed, there are still plenty of unknowns facing the market.

As a result, volatility will remain a major force on Wall Street for some time to come, said Jack Ablin, chief investment officer at Harris Private Bank in Chicago.

He said worries about marquee companies from General Motors Corp. to Citigroup Inc. are unnerving investors.

"What we're seeing is these symbols of American business history really suffering and prompting investors to call into question the viability of the system," Ablin said, referring to the functioning of the broader economy.

Investors have grown increasingly anxious this week that losses from souring debt will swamp banks, even those given financial support through the government's $700 billion rescue plan. Citigroup, in particular, is a concern for Wall Street because the company hasn't booked a profit in the past four quarters.

As the banking giant's shares slid below $4, analysts said Friday it may be forced to merge or sell some of its prized businesses. Citigroup has already raised $75 billion in capital this year, including a $25 billion cash investment from the government - and none of it has been enough to muster confidence.

Investors have also worried about the fate of GM, Ford Motor Co. and Chrysler LLC. The heads of the companies, warning that automakers are perilously low on cash, have been asking Washington for $25 billion in loans. But lawmakers have likely put off a vote on whether to extend a lifeline until next month and have asked the automakers for detailed plans about how they would use the money. The prospect of a bankruptcy filing by one or more of the companies has added to Wall Street's worries about the state of the economy.

Bond prices fell Friday as credit markets eased somewhat following a freeze-up Thursday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, jumped to 3.19 percent from 3.00 percent late Thursday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.02 percent from 0.01 percent late Thursday.

Light, sweet crude for January delivery rose 51 cents to settle at $49.93 a barrel on the New York Mercantile Exchange. The dollar fell against other major currencies, while gold prices rose.

Overseas, Japan's Nikkei stock average jumped 2.70 percent. In European trading, Britain's FTSE 100 fell 2.43 percent, while Germany's DAX index fell 2.20 percent, and France's CAC-40 fell 3.33 percent.

[antoniof123]

These "Communications Majors Posing as Journalists" headlines are ridiculous. Sheesh. The market is up because they sold off yesterday to milk profit and now they''''ll buy, raise the price, then sell off again on Monday to squeeze the last drops out.
Posted by FloydZeppd at 08:34 AM : Nov 21, 2008

True, however the general trend is down it seems we have lost over 40 percent in the last few months. Remember wall street was over 14,000 a few months back. Now it is at 7,500, this is a major drop in the stock market.

Remeber don''t lose sight of what was just a few short months ago that is what happens at first we think things are O.K. then we realize that they are not and the real problems begin.

[txgrouch2007]

I can''t wait until the Democrats take ABSOLUTE POWER next year.

DEMOCRATS WILL BE TO BLAME for EVERYTHING from then on.

Or will they spend the next eight years blaming Bush - and REAGAN??? LOL!

[txgrouch2007]

Remember wall street was over 14,000 a few months back.
Posted by antoniof123 at 08:50 AM : Nov 21, 2008

That was 12 months ago. And I sold off almost everything by July. I sold the last of it in August, because we had to find a lost stock certificate.

For comparison, the stock market fell from 400 to 40 between 1929 and 1932. Then it recovered quickly to 100 and rising. Then the war started...

It had been stable at 100 in 1920.

Yah, falling to half is the BEGINNING of a major drop.

Most of us are looking for it to stabilize at its natural historical trend, which is around 6,000 today.

But it could take years to finish gyrating before it reaches a steady value.

[usclimey]

I can''''t wait until the Democrats take ABSOLUTE POWER next year.

DEMOCRATS WILL BE TO BLAME for EVERYTHING from then on.

Posted by txgrouch2007

So when the economy reverses and heads higher in the summer, that will all be the democrats doing as well hunh?

[nolalou]

I can''''t wait until the Democrats take ABSOLUTE POWER next year.

DEMOCRATS WILL BE TO BLAME for EVERYTHING from then on.
Or will they spend the next eight years blaming Bush - and REAGAN??? LOL!
Posted by txgrouch2007

Well, the Republicans and Bush administration still blames Clinton, so why shouldn''t Obama blame Bush! After all it was the Reagan and Bush policy of de-regulation that is largely responsible for the mess we are currently in! You think that''s something to laugh about, you f-ing MORON!!!

[violist47]

Oh where oh where has that 700 billion gone?
Oh where oh where can it be?
With its bailout cut off and its tears cut long,
Oh where, oh where can it be?

[txgrouch2007]

So when the economy reverses and heads higher in the summer, that will all be the democrats doing as well hunh?
Posted by usclimey at 09:19 AM : Nov 21, 2008

HAR, HAR, HAR! Let''s wait until that happens before we start counting our chickens, SHALL WE????

[wiswolf2]

The gyrations on Wall Street is called "pump & dump", I beleive. Profit-taking is like a vacuum cleaner in our monetary system. Soon, there will be no room for speculation and stock prices will reflect ONLY the actual value of hard assets and inventory. Perhaps this is a good thing: establish a "floor" of actual value, then begin working from there. It may be a bumpy ride for the next 6-12 months.

[txgrouch2007]

After all it was the Reagan and Bush policy of de-regulation that is largely responsible for the mess we are currently in!
Posted by nolalou at 09:21 AM : Nov 21, 2008

See, what did I tell you. They will spend the next eight years BLAMING REAGAN, while they re-elect the Democrats all along.

[txgrouch2007]

It may be a bumpy ride for the next 6-12 months.
Posted by wiswolf2 at 09:31 AM : Nov 21, 2008

At LEAST that long.

With the Democrats in control, look for another speculative bubble like the Roaring Nineties. Then it will burst and trigger more shock waves - who knows when.

It could be a generation before the market stabilizes again.

[whitemale08]

Rockerfellers in trouble?

NOT!!!!

Ben Bernanke said: "Citi-cank is one of [founding] apostles of our financial system and one of the 9 institutions chosen to not fail".

[whitemale08]

Rockerfellers in trouble?

NOT!!!!

Ben Bernanke said: "Citi-cank is one of [founding] apostles of our financial system and one of the 9 institutions chosen to not fail".


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Posted by whitemale08 at 10:06 AM : Nov 21, 2008--

Rockefellars takes a line from Palpatine in STAR WARS Episode III..."I am the [Senate] Fed"!!!

[getoffmine1]

This is not what is causeing the jump in the market, it is the actions of the plunge protection team. It will start falling in the afternoon, just watch.

[newsjunky5]

Funny, but they don''t mention the prospective buyer. It''s Saudi Prince Alwaleed Bin Talal, who made his first fortune buying bank stock back when Bush Sr. ran the banks into the ground.

[bladdy10]

Stop wasting your time trying to find blame.

If you want to save you family before you all end up in a homeless shelter then go to The Benefactor Project.com and use the advice there. It''s free, no sign ins.
http://www.thebenefactorproject.com

[presjfk]

There is no mention of the possible buyer in the article. What could be the reason, that the buyer might be from the Middle East? Our free press sucks.

[presjfk]

Bush should leave now and the Presidency can sit vacant for a few weeks. It would be an improvement.

[mecury69]

"With the Democrats in control, look for another speculative bubble like the Roaring Nineties."

Wouldn''t that be great? Low unemployment, no debt. Economic stability that will take 8 years of Republican rule to destroy.

Yes we can get back there.

[txgrouch2007]

Yes we can get back there.
Posted by mecury69 at 10:57 AM : Nov 21, 2008

You WANT another speculative bubble? You would.

[easeup-2009]

Bush should leave now and the Presidency can sit vacant for a few weeks. It would be an improvement.

Posted by presjfk at 10:43 AM : Nov 21, 2008

I can''t wait until the random, childish irrelevant Bush bashing is over.

[mikezembill]

PHIL GRAMM BLAME HIM FOR THIS.

[getoffmine1]

"With the Democrats in control, look for another speculative bubble like the Roaring Nineties."

Wouldn''''t that be great? Low unemployment, no debt. Economic stability that will take 8 years of Republican rule to destroy.

Yes we can get back there.

Posted by mecury69 at 10:57 AM : Nov 21, 2008

i think they tried that just this past year. when the housing bubble startted to burst they tried to create an energy bubble by artifiacally inflating prices and saying it was based on increased demand. Once it got to $4.00 per gallon people finally cut back, and cut back by large amounts. They got greedy, if they would have kept the price around $3.00 the economy would probably be moving ahead at full steam.

[mikezembill]

tHE GRAMM-LEACH MODERNIZATION ACT IS TO BLAME FOR THIS IT REPEALED THE GLASS-STEAGALL ACT. IT WAS VETOED BY CLINTON THEN OVERIDEN BUY THE REPUBLICAN CONGRESS AND MCCAIN VOTED TO OVERIDE LNO.106-102.113STAT 1338 NOV 12 1999 SO IF YOU WANT TO CONTACT MR.GRAMM CHECK WITH JOHN MCCAIN HE WAS ONE OF HIS ADVISORS IN HIS RUN FOR THE WHITE HOUSE. HE WAS THE ONE THAT WANDED TO RUIN YOUR HEALTH-CARE GRAMM TRIED THIS BEFORE.SO IF YOU WANT TO HUNT HIM DOWN FOR WHAT EVER REASON I THINK HE IS STILL IN TEXAS.

[txgrouch2007]

IT WAS VETOED BY CLINTON THEN OVERIDEN BUY THE REPUBLICAN CONGRESS
Posted by rxzyu at 11:47 AM : Nov 21, 2008

Nice attempt to RE-WRITE HISTORY!!!

It was "veto proof." Clinton signed it into law. End of story.

[txgrouch2007]

I can''''t wait until the random, childish irrelevant Bush bashing is over.
Posted by easeup at 11:22 AM : Nov 21, 2008

NO NO NO YOU''RE TOTALLY WRONG!!!

It should be "irrelevant and childish" not "childish irrelevant!!!" You TRAITOR!!!!

LOL!

[mikezembill]

TXGROCH2007 YOU MAY BE RIGHT BUT NO MATTER THE REPUBLICANS FVCKED THE AMERICAN PEOPLE AGAIN.

[mikezembill]

TXGROUCH2007 ANYWAY IF SOMEONE WANT''S TO HUNT THE PEICE OF SHI! GRAMM I DOWN FOR ANY REASON I THINK HE LIVES IN TEXAS BUT CHECK WITH JOHN MCCAIN FIRST THEY ARE BIG BUDDS.

[staplesla]

This company is dead. Citi''s stock price is again crashing today and it is breaking on CNBC that they''ve shopped the company around but no one will buy it. Good luck lasting through the weekend!

[easeup-2009]

NO NO NO YOU''''RE TOTALLY WRONG!!!

It should be "irrelevant and childish" not "childish irrelevant!!!" You TRAITOR!!!!

LOL!

Posted by txgrouch2007 at 11:56 AM : Nov 21, 2008

All right, all right........from now on, we can skip the grammar checking, deal?

[lady_organs]

Wow they are down only 21% as of now. Management there is pure genius. They should give themselves a bonus.

[staplesla]

Lady_Organs - CITI is down 21% today, 80% in 3 months.

[lady_organs]

Lady_Organs - CITI is down 21% today, 80% in 3 months.


--------------------------------------------------------------------------------

Posted by staplesla
===========================
Yes I know. I short sold it a few weeks ago.

[staplesla]

Citigroup will certainly be a different type of company come Monday.

[irmcvet97]

I was a Bush activist and I appologize to every one. That being said I will expect your appology in 4 years or less. "WHAT CHANGE" people? It looks like a Clinton White House to me. Obama is just going to be a figure head and nothing more.

Posted by oldtimer1941 at 12:15 PM : Nov 21, 2008

LOL Better look again! LOL Regardless the Change is supposed to be in POLICY not personal. He promised to get the BEST people to carry out his Change. I most certainly will be watching to see that the Change he promised takes place. I''m willing to bet Bush''s Economic Policy will be gone in a Week... less. His Policy toward other nations may be around even less time.

[donevis-2009]

Hey Kids, lets watch and see if the latest hedge fund prop up last until 4:30. Any bets it won''t?

[neonink]

What???

Did the little dummies on the Board of Citi not figure anything out?


Their eyes have been bigger than their stomach and brains as of late.

[neonink]

as ps. Hillary had 18 million votes of confidence in her.

stick it oldtimer.

[dkhorse1]

Stocks growing based on a nomination? Talk about lasting and solid growth.

[used2bfedup1]

Look at that!!! Obama is already more Presidential than Bush. Just look at his admin picks.

Go Obama lets fix this thing.

[zaniacloclo]

This should calm Wall Street.
This was a good choice

[renonv5]

Wall Street sure is easy to pacify.

[bjcone8559]

Every time Bush pops his head out the White House door, the market crashes!! Obama makes a decision behind closed doors and the market soars. We may get out of this Bush depression quicker than I thought.

[gce65]

Certainly can''t depend on Bush to do anything to help the markets. We have to rely on the President-Elect 2 months before he''s even in office.

[generey]

Obama is just going to be a figure head and nothing more.

Posted by oldtimer1941 at 12:15 PM : Nov 21, 2008

Thats all any Pres is to a certain degree. They have the power to violate other nations and persecute humans, but a figure head no less. "All the President''s men (& women)" run the office. BUT so far PRESIDENT Obama is making good decisions, & he has''nt even moved into the house yet!

[cpelzar--2008]

"The advance in stocks also came as the FDIC said it would guarantee up to $1.4 trillion in U.S. banks'' debt for more than three years as part of the government''s financial rescue plan. The directors of the Federal Deposit Insurance Corp. voted Friday to approve the plan, which is meant to break the crippling logjam in bank-to-bank lending."

Hello, This is the reason the market went up today. Not Obamas picks, please......

[dkhorse1]

Manufacturing goods and exporting them is what produces income for the economy; service sector jobs just maintain it, barely. The U.S. used to be primarily manufacturing, but is now primarily service sector.

I%u2019ve not heard anyone in government talk about bringing manufacturing back to America, sure Obama has talked about tax incentives to keep jobs here, but they need to be brought back, most have already been sent overseas. The ones left are here because it%u2019s not cost effective to move them overseas.

I guess we have to wait until it more cost effective to manufacture goods here in America then in China, India, Canada or Central/South America (at rate things are going it won%u2019t be long). What a state America will be in by that point.

[staplesla]

The new treasury secretary is the same guy that was on the watch of AIG and Lehman Brothers. great job!

[whitemale08]

"Welcome-rally" is good but it won''t get us out of the Bush/Hannity/Limbuagh-depression that we are all suffering.

I hope Tim will have the guts to STOP THE BAILOUTS and call in Lyndon Larouche for advice. It''s the only way to get ourselves out of this Bush/Hannity/Limbuagh-Depression.

larouchepac.com

[susanhelit]

Competent leadership - one more of Obama''s great changes from Bush - and the market reacts well to it. And that''s going to include a fair number of Clinton people - because he too hired competent people who did a great job for our economy.

[kuei12]

If you think this will help wallstreet you are foolish. Next week it will tank again. Why? Because there are no more safety protocols in the stockmarket anymore. If you knew how the fed reserve and fdic held WAMU and LEHMAN brothers at gunpoint and let companies like JPM CHASE steal all their assets in one bid auctions (HALIBURTON style) you would never invest in financial stocks again. Shareholders were flat out robbed and the government held the gun. The politicians got paid and everyone else but the stockholders. The $700billion bailout has benefitted nobody except bankers and bush''s cronies, as I predicted. It was the biggest scam played on americans since bush''s wars.
Go ahead. Watch the video. I dare you.
http://www.youtube.com/watch?v=pd_zI1FNIJ0