Stocks jump on report of Geithner nomination for Treasury
22.11.2008 07:40
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- Source: toledoblade.com
NEW YORK — Wall Street staged an astonishing comeback Friday, with the major indexes jumping more than 5 percent and the Dow Jones industrials surging nearly 500 points in a late afternoon rally, ending another volatile week that saw stocks reach six-year lows.
Stocks erased about half of the losses that came in steep selling Wednesday and Thursday after investors got an unexpected jolt of confidence following a report that President-elect Barack Obama plans to name New York Federal Reserve President Timothy Geithner as Treasury secretary.
It wasn't immediately clear whether the market's advance following the report 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.
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 after the reports on Geithner.
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.
According to preliminary calculations, the Dow rose 494.13 points, or 6.54 percent, to settle at 8,046.42. The benchmark 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.
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