U.S. stocks on Friday surged on a report leader-elect Barack Obama would nominate New York Federal Reserve leader Timothy Geithner as Treasury secretary. The leap higher in the final hour of trade came on the heels of a two-session freefall and halved the sale's weekly decline.

After a volatile session, equities rocketed higher in the wake of an NBC report that Obama would appoint Geithner to head the Treasury Department.

Of the trio, Geithner is "the one people in the sale wanted to see," said Owen Fitzpatrick, head of the U.S. equity group at Deutsche Bank. The choice is particularly important in light of Treasury Secretary Hank Paulson's comments earlier in the week "of being done with Tarp," said Fitzpatrick of the Paulson's decision to let the next administration decide how to spend the remaining roughly $350 billion of $700 billion bailout package.

"The comfort level is there with Geithner," said Fitzpatrick.

The Dow Jones Industrial Average (DJI) surged more than 500 points before finishing at 8,046.42, up 494.13 points, or 6.5%. The blue-chip index lost 5.3% for the week.