Dow Surges on Treasury Secretary News

The Dow reversed yesterday's losses and closed back above 8,000 with a gain of 494 points. Many analysts are pointing to this news as the catalyst:

Geithner Bounce?

Minutes after news broke that Geithner would be joining the incoming Obama administration, the markets took off, surging well beyond session highs. Geithner, a key figure in the financial crisis who helped architect the rescue of AIG (AIG), will take over amid the greatest financial crisis in nearly a century.

He's no stranger to the Treasury Department, having served as an undersecretary from 1999 to 2001. He's intimately involved in the current crisis in his role as New York Fed president.

It's not clear if the markets were cheering Giethner as a pick versus any of the other leading candidates, or just the removal of another mystery that had been weighing on the markets. News also broke Friday afternoon that New Mexico Governor Bill Richardson has been tapped to lead Commerce Secretary and that Hillary Clinton has accepted the position of Secretary of State.

A lot of people in both the financial and political communities have been saying that Treasury should have been the first pick Obama made, and he should have done it right after the election to calm the markets. We've had a drop of over 1,600 points since election day - maybe this will start to calm things down and get the market moving back in the right direction.