Some good signs in U.S. economy

By Jackie Frank

WASHINGTON (Reuters) - Bolstering hopes that the U.S. economy is stabilizing, Citigroup (C.N) and General Electric (GE.N) on Friday posted better-than-expected results, and U.S. consumers reported more confidence, but the good news came packaged with warnings for the recovery.

Global stocks rose for a sixth straight week and oil prices rose above $50 a barrel on the upbeat mood of consumers and quarterly earnings. But the boost was tempered by caveats from both Citigroup -- worried about deteriorating consumer credit -- and GE -- worried about fallout from commercial real estate losses.

For the week, the Dow Jones industrial average .DJI climbed 0.6 percent to 8,131.33. The dollar rose 0.96 percent against a basket of currencies at 86.02 and gold fell about 1 percent on the stock rally and dollar rise.

"The rate of deceleration in the economy is slowing," said David Lutz, managing director of trading at Stifel Nicolaus Capital Markets in Baltimore, who pointed to signs of improvements in credit markets.

At the same time, the European Central Bank said bold, unconventional measures are needed to ensure recovery in 2010.

Although the banking industry's problems are far from over, the smaller-than-expected loss from Citigroup, following good profit reports from Goldman Sachs (GS.N), JPMorgan Chase (JPM.N), Wells Fargo (WFC.N) and others gave investors reason to believe government efforts to jump-start the economy are helping.

Banks would be the focus of any unconventional measures the European Central Bank unveils next month, ECB President Jean-Claude Trichet said. He is expected to join others in moving beyond rate cuts to spur the economy and credit markets.

"Confidence today relies equally upon the audacity of our immediate decisions and upon the soundness of our exit strategies," Trichet said in a speech in Tokyo.