Citigroup reported a loss per share of 18 cents, which was narrower than the 34 cents analysts predicted. A year ago, the company suffered a loss of more than $5 billion, or $1.03 a share. Shares rose 12 percent in pre-market trading. Citigroup has been the weakest of the large U.S. banks, posting quarterly losses since the fourth quarter of 2007, but in March, CEO Vikram Pandit triggered a stock market rally after he said that January and February had been profitable for Citigroup.  It was one of the first signals that the banking industry might not be as sick as many believed.

Earlier that month, fears that banks would need to be nationalized sent stocks plunging to 12-year lows. Citigroup’s better-than-expected report on Friday came after surprisingly solid earnings from JPMorgan Chase & Co., Goldman Sachs Group Inc., and Wells Fargo & Co. over the past several days. While recent results from these healthier banks have brought some relief to investors, many have been waiting to see how more troubled banks such as Citigroup have fared. 

On Wall Street, futures spiked early Friday following the earnings announcements, retreated slightly as investors looked deeper into the reports, then moved higher again. Still, the moves were modest as investors were mindful of the weakness that still pervades the financial sector.

The New York Times also released  a report that some 19 banks undergoing government stress tests will pass. Citigroup shares alone rose by 10%.  Money managers who recently purchased stock in Wells Fargo and Citigroup are quite happy they did. Also a strong rally in retail stocks helped push the broader stock markets to gains on Wednesday, but with many chains reporting disappointing March sales have put pressure on that sector. Disappointing results from Wal Mart were a worrisome signal for the broader economy. With people already cutting back on spending because of the economy at higher end shops like Tiffany so are now the lower end spenders at places like Wal Mart. Regardless, there’s growing evidence that the economy is beginning to turn for the better. Inventories for one have fallen by the largest increment on record which is another bit of good news.

Looks like the tide is turning.