WASHINGTON — For the first time in five years, Moody's Investors Service has revised its outlook for U.S. local governments to stable from negative, as housing markets continue to stabilize, municipalities' fund balances remain healthy and cities and school districts control their costs.

But in its "2014 Outlook — U.S. Local Governments," released Wednesday, the rating agency cautioned that conditions will remain more difficult for local governments than before the 2008 recession and that "'pockets' of serious credit pressure remain."

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