U.S. share prices, which had been down most of the day, turned around in the final hour of trading Friday and soared nearly 500 points. VOA's Barry Wood reports the stock market averages were still down on the week.
The market made an extraordinary reversal Friday afternoon after a news report said that President-elect Barack Obama would choose New York Federal Reserve Bank President Timothy Geithner to be his Treasury secretary. Geithner has been a favorite of Wall Street as he has been directly involved with the financial crisis since its beginning 17 months ago. The appointment has not yet been officially announced.
The Dow Jones Industrials gained 494 points, or six percent, to 8,046. The Standard and Poors 500 was up 47 points or six percent to 800. For the week the Dow average was down over five percent while the S&P was down over eight percent.
Citigroup, formerly the largest US commercial bank, again lost ground, closing below $4 a share as investors worried about the company's future. Earlier this week Citigroup said it would eliminate over 50,000 jobs. Its stock price lost 61 percent on the week to a 15-year low and has lost 87 percent of its value this year. Citigroup was heavily exposed to securitized debt obligations and involved in sub-prime mortgage loans.
John Williams a credit card analyst at Macquarie Capital in New York says there is likely to be more distress for banks as consumers fall behind on their credit card payments. He says that three key data sets suggest trouble ahead. "Delinquencies show you what people are doing right now. It's a good indicator of what is going to happen in the future. Charge offs tell you what people are doing right now in terms of whether they are paying their bills. And then monthly payments obviously are how much people are paying towards their bills. We're seeing deterioration across the board in those metrics, particularly in payment rates," he said.
Williams told Bloomberg Television that credit card payment rates are currently near a five-year low in the United States.
The dollar closed mixed in New York while gold gained $43 to $791 an ounce.