WASHINGTON — President-elect Barack Obama on Friday selected the head of the Federal Reserve Bank of New York as his nominee for Treasury secretary, choosing a vigorous advocate of government intervention in the troubled economy who nonetheless commands wide respect among conservatives.
Timothy F. Geithner, 47, has been a central player in the Bush administration's response to the economic crisis, and his selection indicated the incoming administration's desire to hit the ground running. Obama is expected to announce Geithner's selection as early as Monday, people familiar with the situation said.
News of the choice of a successor to Henry M. Paulson was welcomed as a reassuring signal, coming as it did amid rising concern over a perceived leadership vacuum in the capital.
Though panicky financial markets posted heavy losses on several days this week, and Congress remains deadlocked over a bailout for Detroit automakers and a new economic stimulus package, the administration has indicated that it plans no new economic initiatives for the rest of the year.
On Thursday, the Dow Jones industrial average plummeted to its lowest point since 2003 and the Standard & Poor's 500 index fell back to its 1997 level. But the news about Geithner helped send the Dow rocketing Friday. It closed up 494 points, or 6.5%, erasing Thursday's drop of nearly 450 points.
The decision drew support across the political spectrum.
"He's smart and levelheaded," said Alice M. Rivlin, a Democrat and former vice chairwoman of the Federal Reserve. "His involvement in the crisis . . . is a very important qualification."
"It's a terrific choice," said Kevin Hassett, director of economic policy studies at the American Enterprise Institute, a conservative think tank. "He's been in the middle of this, he has been at Treasury and he's a very bright guy, highly respected by people in both parties."
"He's decisive, experienced, young, with a lot of energy," said Gary Schlossberg, senior economist at Wells Capital Management. "He's going to need it."
Obama also moved to solidify the rest of his economic team, offering former Clinton administration Treasury Secretary Lawrence H. Summers a role as senior White House advisor.
Summers, known as a brilliant economist with a tendency to generate controversy, had been a leading contender for Treasury secretary, along with former Federal Reserve Chairman Paul A. Volcker.
