Friday, November 21, 2008

Dow Soars After News of Obama's New Treasury Secretary

After eight years of the George Bush/GOP economic policy, news of President-elect Barack Obama's pick of Timothy F. Geithner, the president of the New York Federal Reserve, for Treasury Secretary set off a huge rally on Wall Street.

The markets are apparently "applauding the change":

After two days of punishing losses, Wall Street surged on Friday afternoon after news reports said that President-elect Barack Obama had tapped Timothy F. Geithner, the president of the New York Federal Reserve, to be secretary of the Treasury.

Skittish financial markets closed dramatically higher following the reports, recouping some of the slide that brought them to 11-year lows. The Dow Jones industrial average soared 494.13 points or 6.5 percent, closing at 8,046.42. The broader Standard & Poor’s 500-stock index swung 6.3 percent higher, or 47.59 points to 800.03. The Nasdaq composite was up 5.2 percent.

“It was almost a Geithner relief rally,” said Steve Neimeth, portfolio manager at AIG SunAmerica Asset Management.Bits of news have swung financial markets widely
in recent weeks, and on Friday afternoon, traders seemed to rally behind unconfirmed reports that the country’s next president had picked his chief financial officer. The markets were not applauding the choice specifically, said Ryan Larson, senior equity trader at Voyageur Asset Management, but any choice at all.

“What you’re seeing is a rally off the headlines,” Mr. Larson said. “The markets are applauding change. It’s a hope that change will bring some sort of effectiveness to these plans and ultimately make a road map to come out of it.”

No comments: