Nov. 21 (Bloomberg) -- U.S. stocks rose and the Standard & Poor’s 500 Index rebounded from an 11-year low after President- elect Barack Obama picked New York Federal Reserve Bank chief Timothy Geithner to head the Treasury.

“This news could really give the stock market a badly needed shot in the arm,” Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, wrote in an e-mail to clients. Geithner is a “fantastic choice to help lead the financial markets out of the wilderness.”

Citigroup Inc. pared a 35 percent slide and JPMorgan Chase & Co. trimmed a 16 percent tumble after a Democratic aide said Obama will nominate Geithner to replace Henry Paulson. National- Oilwell Varco Inc. and Chesapeake Energy jumped more than 12 percent as crude advanced for the first time in six days. The rally in the S&P 500 came after this week’s rout dragged its price-to-earnings valuation to the cheapest since 1995.

The S&P 500, which is poised for a third-straight weekly decline, gained 5 percent to 790.29 at 3:38 p.m. in New York. The Dow Jones Industrial Average rose 392.1 points, or 5.2 percent, to 7,944.39, while the Nasdaq Composite Index added 3.6 percent to 1,363.44.