Stocks Surge on Geithner Pick

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Trading in stocks was active Friday, a day that November stock options expired. Bonds prices and the dollar index fell Friday, while gold and crude oil futures moved higher.

Also in the headlines, Congress headed home for Thanksgiving, leaving U.S. automakers still struggling for loans to keep going. General Motors (GM) Friday extended its holiday shutdown and said it would make more production cuts.

Shares of Citigroup (C) fell almost 20% Friday, following Thursday's drop of 26%, its worst one-day percentage decline ever. Initially Citi stock was buoyed Friday by a Wall Street Journal report that Citi was weighing the possibility of auctioning off pieces of the financial giant or even selling the company outright. But chief executive Vikrum Pandit said on Friday he does not want to sell Citi's Smith Barney brokerage unit or break up the troubled bank, based on several news organizations' accounts of a Friday morning conference call with Pandit's staff.

Though the Geithner pick lifted the market's mood, investors have been continually reminded of the weak state of the economy both in the U.S. and globally.

On Friday, European stock markets fell, with major indexes in London, Frankfurt and Paris down 2% or more. Asian markets finished mixed, with Tokyo stocks rising 2.70% and Hong Kong gaining 2.93%, but Shanghai falling 0.72%.

In a speech Friday, a Fed official warned the U.S. economy could stay weak for quite a while. "We likely are in for a protracted period of poor economic performance," Charles Evans, president of the Federal Reserve Bank of Chicago, said.

On Friday, President Bush signed into law an extension of jobless benefits. Earlier in the year, Bush expressed doubts about further benefit extensions, but he came to support the legislation as new figures showed new claims for jobless aid had reached a 16-year high. In what could be its last vote of the year, the Senate approved a measure Thursday that would provide up to three months of extra benefits for those whose unemployment benefits have run out or are about to expire. The House passed the bill in October.

There were no significant economic reports released Friday.

In other U.S. markets Friday, the 10-year Treasury note slipped 1-20/32 to 104-22/32 for a yield of 3.2%, while the 30-year Treasury bond dropped 4-06/32 to 114-12/32 for a yield of 3.69%.

December West Texas Intermediate crude oil futures hovered around the $50-per-barrel mark on Friday, ending up 96 cents at $50.38 per barrel.

December gold futures rose almost 7% to 800.50 per ounce.