Jobless Claims Stubbornly High, Regional Banks Under Pressure (FITB, MI, USB)

The number of U.S. workers making new claims for jobless benefits rose unexpectedly last week to the highest level in six months, fueling concerns that the recovery and labor market remain weak. Initial unemployment claims rose by 2,000 to 484,000 in the week ended August 7, the Labor Department reported this morning. The four-week moving average of unemployment claims, which economists prefer because it smoothes out weekly fluctuations, rose 14,250 to 473,500. Under pressure today are regional banks, whose performance is closely tied to the U.S. consumers' ability to repay mortgage obligations. Fifth Third Bancorp

is down by 22 cents, or 1.78%, to $12.16. Marshall & Ilsley

and U.S. Bancorp

are down by 0.76% and 0.36%, respectively. Shares of these three banks have been hammered during the last three months as the economic recovery has stagnated. Fifth Third has lost 19% over the last three months. M&I and U.S. Bank have shed 27% and 16.7%, respectively during that period.