US STOCKS-Wall St flat on outlook worries, Citigroup

* Market falls as investors fret about outlooks

* Citigroup, GE down after quarterly earnings

* Nasdaq down 0.8 pct, Dow & S&P turn positive

NEW YORK, April 17 - The Dow Jones industrial average and the S&P index edged higher on Friday as a consumer survey suggested the U.S. economy could be stabilizing but mixed signals from Citigroup and General Electric about their outlooks capped gains.

On Nasdaq investors paused after a recent strong run up to assess the prospects for the tech sector after Google's chief executive said the economy remains tough.

Shares of Citigroup dropped more than 4.5 percent to $3.83 as news of a smaller-than-expected first-quarter loss was tempered by comments from the company indicating consumer credit deterioration remained a worry.

"Investors after taking a close look at Citi are reevaluating the news, it's really mostly accounting benefit from moving to a mark-to-model approach," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago

Rules requiring banks to price assets at market value were loosened recently, boosting hopes that banks would not have to grapple with more writedowns in the near term.

Shares of General Electric dropped 0.7 percent to $12.19 after the company posted better-than-expected results but indicated that fallout from commercial real estate losses may worsen.

The Dow Jones industrial average gained 8.84 points, or 0.11 percent, to 8,134.27. The Standard & Poor's 500 Index rose 1.39 points, or 0.16 percent, to 866.69. The Nasdaq Composite Index dropped 9.97 points, or 0.60 percent, to 1,660.47.

Gains in the shares of companies seen as better able to withstand a recession, including healthcare and consumer staples, helped limit losses on the Dow and the S&P 500.

Even with today's decline the S&P 500 was within striking distance of notching a sixth straight weekly advance.

On Nasdaq, technology shares such as Microsoft, lost ground after a recent runup with shares falling 3.1 percent to $19.15.

"We do need some top line growth to sustain values there," said Ablin. "We would like to see some cyclical portions of the economy expand to sustain tech."

In other news, Deutsche Bank said Procter & Gamble, Colgate-Palmolive, Kimberly-Clark Corp were undervalued at current levels. P&G rose 2.8 percent to $51.86, making the top boost to the Dow even though Deutsche Bank also cut its price target on the stock.

The Defensive health care sector was among the top boost to the S&P with the S&P Health Care 35 index up 0.5 percent.

Shares of fast food company McDonald's Corp rose after the chief executive officer told CNBC that while the environment was still "tough," he saw some thawing. The stock rose 1.6 percent to $55.57, making it one of the top boosts to the Dow.

On the economic front U.S. consumer confidence rebounded in April to the highest levels since September, the Reuters/University of Michigan Surveys showed on Friday.