NEW YORK (AP) -- Wall Street got a boost of confidence late Friday following a report that President-elect Barack Obama plans to name New York Federal Reserve President Timothy Geithner as Treasury secretary.
TRACK YOUR STOCKS HERE
Stocks surged, with the Dow Jones industrial average jumping 325 points.
It wasn't immediately clear whether the market's advance following the report by NBC News was because it was in favor of Geithner as the Treasury nominee, or because investors are looking to pin down as many unknowns as possible about the new administration. 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.
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.
Ahead of the report on Geithner, stocks had fluctuated Friday as Wall Street took a break from the heavy selling of recent days. Energy, utility and technology stocks showed some advances, but bank stocks declined sharply.
Stocks struggled to take a direction in early trading, then moved cautiously higher midday, but pulled back later in the afternoon in another erratic session that has become the norm on Wall Street. Stocks didn't move sharply higher until after the report that Obama would tap Geithner.
Some advancement had been expected during the session following two days of steep declines. On Thursday, the Standard & Poor's 500 index fell 6.7 percent to its lowest close since April 1997, while the Dow Jones industrial average fell 445 points, or 5.6 percent, to its lowest finish since March 2003.
In afternoon trading, the Dow Jones industrial average gained 369.56, or 4.89 percent, to 7,921.85. The Dow's rise followed a drop in the blue chips of 10.4 percent Wednesday and Thursday, the biggest two-day slide since October 1987.
The Standard & Poor's 500 index rose 31.17, or 4.14 percent, to 783.61, and the Nasdaq composite index rose 44.61, or 3.39 percent, to 1,360.73.
The Russell 2000 index of smaller companies rose 11.59, or 3.01 percent, to 396.90.
With the steep pullbacks 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 has lost 50.4 percent this year.
E-Mail Story
Print Story
