The Dow and the S&P 500 stock indexes rose for a fourth straight day on Friday after Citigroup said it did not need any more government aid, bolstering hopes that stabilization is returning to banking.

Caution about the market's recent surge had some investors booking profits, however, keeping the Nasdaq near break-even.

Shares of Citigroup jumped nearly 9 percent to $1.82 after Chairman Richard Parsons told Reuters the bank does not need any more government capital injections and expressed confidence Citi would remain in private hands.

Bank of America climbed 7 percent to $6.26 while JPMorgan gained nearly 3 percent to $23.85. The S&P financial index <.GSPF> edged up 0.6 percent.

What's changed is that it's possibly not the end of the world, said Manny Weintraub, managing director of Integre Advisors in New York. Banks are borrowing at nothing and they are lending out getting high spreads, so net-interest margins are enormous. You're making more money from zero-interest rates than you are losing.

The Dow Jones industrial average <.DJI> gained 33.77 points, or 0.47 percent, to 7,203.83. The Standard & Poor's 500 Index <.SPX> added 2.92 points, or 0.39 percent, to 753.66. The Nasdaq Composite Index <.IXIC> dropped 1.77 points, or 0.12 percent, to 1,424.33.

Parson's comments in an interview with Reuters rounded off a spate of upbeat statements from other U.S. bank executives, including those of JPMorgan and Bank of America, who all said 2009 had gotten off to a good start for them.

A run-up on Friday would help Wall Street snap a four-week losing streak and score its longest string of daily advances since January.

Officials have repeatedly said getting banks stabilized was crucial to putting the economy on the road to recovery.

Sentiment also got a boost from news that China was ready to pump more money into its economy, the world's third biggest.

Optimism about banks has helped the benchmark S&P 500 stock index bounce off 12-year lows, but since the start of 2009 it is still down 16 percent.

Friday's economic calendar included the Reuters/University of Michigan Surveys of Consumers preliminary March consumer sentiment index, which unexpectedly rose slightly.

(Editing by James Dalgleish)