Clinton 'ready' to be US secretary of state: report

Hillary Clinton is "ready" to be Barack Obama's secretary of state, both sides said Friday, while reports said New York central banker Timothy Geithner was set to be named Treasury chief.

The president-elect's heavy-hitting cabinet took shape on a day of frenzied reports and speculation, 60 days before Obama takes the oath of office and at the end of another punishing week for the U.S. economy.

Reports circulated that Clinton had already decided to accept an offer to become the face of U.S. diplomacy abroad.

The New York Times said it was a done deal. "She's ready," The Times quoted one of two Clinton associates who confirmed the deal as saying.

Senior Clinton advisor Philippe Reines downplayed the report, while suggesting that the process of vetting the Clintons, and moving towards an agreement with Obama, was going well.

"We're still in discussions, which are very much on track. Any reports beyond that are premature," Reines said.

An Obama aide also said things were "on track" but said there were no plans for a formal announcement on Clinton's appointment until after the Thanksgiving holiday next Thursday.

Economic team

America's NBC News meanwhile reported that Obama would roll out Geithner at a news conference on Monday, and also unveil the rest of his economic team, including New Mexico Governor and ex-U.N. ambassador Bill Richardson as commerce secretary.

There is also speculation that Obama will ask President George W. Bush's defense secretary, Robert Gates, to stay on at the Pentagon to oversee the early unwinding of the Iraq war.

Stocks soar

U.S. stocks soared on the Geithner news pushing major indices up more than 6 percent. The Dow Jones industrial average closed above 8,000.

"A fantastic choice to help lead the financial markets out of the wilderness," said Chris Rupkey, economist at Bank of Tokyo-Mitsubishi in New York. He called Geithner a "crisis manager par excellence" who would hit the ground running.

Obama may consider former Bill Clinton administration Treasury chief Lawrence Summers as a possible successor to Federal Reserve Chairman Ben Bernanke, whose term ends in January 2010, a Democratic source said.

A senior Democrat told Reuters in Washington that Obama wanted Geithner for the Treasury job, but had yet to make an offer. He did confirm that Summers was no longer under consideration. "Summers is off the list," he said.

Obama, who beat Republican John McCain in the Nov. 4 election, takes over from George W. Bush on Jan. 20. He has been largely hunkered down in Chicago since the election working on his administration team.

A fantastic choice to help lead the financial markets out of the wilderness

Chris Rupkey, economist at Bank of Tokyo-Mitsubishi in New York

Centrist bent

Set to become the first black U.S. president, Obama will inherit a deeply unpopular war in Iraq and another war in Afghanistan, where violence has soared, and will seek to rebuild relationships with allies, particularly in Europe.

Retired Marine Gen. James Jones has emerged as a leading contender for White House national security adviser, according to Democratic sources. Jones is a former top operational commander of NATO.

Obama is also leaning toward keeping Defense Secretary Robert Gates. Gates, who replaced the combative Donald Rumsfeld in 2006, is praised by both Republicans and Democrats in Congress for overseeing a military strategy shift in Iraq that helped bring the country back from the brink of civil war.

Analysts said the foreign policy team Obama was assembling seemed to signal a centrist bent for a president-elect who launched his campaign emphasizing liberal, anti-war message.

Obama and Clinton differed on some issues during the campaign, with the former first lady taking a tougher line on issues such as the Iraq war and Iran.

The two had contrasting styles on the campaign trail, with the calm Obama earning the nickname "No Drama Obama" as the leader of a disciplined team adept at staying on message.

Clinton's campaign, by contrast, was marked by infighting among aides, more turbulence and numerous leaks to the media.

But as the wife of a former president, she has name recognition and clout that Obama views as an asset.

"Obama believes Clinton would bring immediate respect and stature to the role at a time when the country is in need of strong relationships around the world," said an Obama aide, who spoke on condition of anonymity.

"Throughout the campaign he always had a great deal of respect for her intellect, work ethic and thinks the advantages of Clinton serving far outweigh the downsides."