Weakness in economy slowing according to Fed

On Wednesday the Federal Reserve said despite the continued weakness in the U.S. economy, the rate of the economic shrinkage was lowering.

The U.S. economy continued to weaken in March and early April but the speed of contraction was fading amid scattered signs the country's recession may be nearing an end, the Federal Reserve said.

Five of the 12 districts noted a moderation in the pace of decline, and several saw signs that activity in some sectors was stabilizing at a low level, according to the Fed's Beige Book summary of anecdotal reports from its 12 regional banks.

The survey is based on data collected by the Federal Reserve Bank of Dallas on or before April 6.

The results of the report were positively greeted by Wall Street with the Dow Jones industrial average adding 20 more points to stand at 7,970, fifty points higher than before.

Although conditions are still weak right now, there are signs that there is stabilization in certain sectors, said Michelle Meyer, an economist with Barclays Capital. We're clearly still in a deep recession but there are signs that things are looking a little bit brighter.

Interest rates have been greatly dropped to almost zero by the U.S. central bank in a bid to fight the recession.

Fed Chairman Ben Bernanke on Tuesday said there were tentative signs the economic decline was slowing.

According to Fed officials the huge monetary stimulus, together with unprecedented programs to promote growth by flooding markets with money, is expected to gradually restore growth this year.