With the financial crisis looming as a priority of his term, President-elect Barack Obama sought to put his imprint on efforts to stem the turmoil as he introduced his economic team on Monday, nominating Timothy F. Geithner as Treasury secretary and Lawrence H. Summers to head the White House Economic Council.
By naming a team deeply experienced in dealing with financial crises — Mr. Geithner was heavily involved over the weekend in the efforts to stabilize Citigroup — Mr. Obama underscored his determination to assure Americans and foreign investors that he would aggressively step into a leadership vacuum in Washington during the transition.
Moreover, by pledging that his economic team would begin work “today” on recommendations to help middle-class families as well as the financial markets, the president-elect sought to convey an impression of continuity and coordination, so that his administration can “hit the ground running.”
The president-elect also announced that he had chosen Christina D. Romer to head his Council of Economic Advisers and Melody Barnes as director of his White House Domestic Policy Council. Ms. Romer is an economics professor at the University of California, Berkeley, while Ms. Barnes is a longtime aide to Senator Edward M. Kennedy of Massachusetts.
The recent economic news, capped by the Citigroup effort, “has made it even more clear that we are facing an economic crisis of historic proportions,” Mr. Obama said at a news conference. He listed the drop in new home purchases, the surge in unemployment claims to an 18-year high and the likelihood of up to a million further job losses in the coming year.
“While we can’t underestimate the challenges we face,” he said, “we also can’t underestimate our capacity to overcome them to summon that spirit of determination and optimism that has always defined us, and move forward in a new direction to create new jobs, reform our financial system and fuel long-term economic growth.”
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Stocks surged Monday in a broad rally as Citigroup's massive rescue package and President-elect Obama's picks for his economic team pushed investors off the sidelines.
The Dow Jones industrial average (INDU) gained 397 points, or 4.9%, after having been up 552 points earlier in the afternoon. The Standard & Poor's 500 (SPX) index rose 6.4% and the Nasdaq composite (COMP) gained 6.3%.
The market also rallied Friday. The two-session gain of 891.10 points was the biggest two-session gain ever, according to Dow Jones. The percentage gain of 11.8% was the biggest two-session percentage gain since Oct. 1987.
The S&P 500 also saw its biggest two-session percentage gain since Oct. 1987, rising 13.2%. Its point gain was not significant statistically.