Can Wall Street make it four consecutive days of gains for stocks and exchange traded funds (ETFs)? The markets still seem to be trying to figure that one out.

The U.S. trade deficit narrowed 9.7% in January for a record sixth consecutive month to its smallest since October 2002, reports Reuters. The longest run previously had been from April to August 2007.

Exports of goods and services fell 5.7% from December to the lowest since September 2006. Imports fell 6.7% to the lowest since March 2005. The narrowing really reflects the ongoing economic downturn.

In better news, consumers are feeling a lighter mood in March, although sentiment overall remained near record lows, reports Burton Frierson for Reuters. Confidence increased to 56.6 from 56.3 in February, beating expectations of a reading of 55.

More encouraging comments have come from banking executives, as well. Citigroup (C) Chairman Richard Parsons said the bank doesn’t need additional government help; Bank of America’s (BAC) CEO Ken Lewis said the bank had been profitable in January and February, reports Sara Lepro for the Associated Press.

The Financial Select Sector SPDR (XLF) is up 30.4% this week.

In more nerve-wracking news, Chinese premier Wen Jiabo expressed concern about the safety of China’s $1 trillion investment in U.S. government debt, says Micahel Wines for The New York Times. Wen asked President Barack Obama to provide assurances that China’s investment would hold its value amid the global economic crisis.

China has the world’s largest reserves of foreign exchange, estimated to be around $2 trillion. Half of that has been invested in U.S. Treasury notes and other government-backed debt. But China has a dilemma: if the U.S. government borrows less and engages in less fiscal stimulus, the value of the bonds will remain intact; but less spending in the United States could slow a recovery and keep demand for Chinese goods low.

The PowerShares 1-30 Laddered Treasury (PLW) is down 6.6% year-to-date and yields 3.55%.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.