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Oil prices ended slightly higher but eased off a seven-week high Thursday, as an unexpected rise in new jobless claims cast a shadow over a recovery in the economy and oil demand.

U.S. crude for September delivery, which expires on Thursday’s close, settled up 12 cents at $72.54 a barrel.

Oil markets have been watching broader economic indicators for signs a recession may soon end, which could foreshadow a rebound in slumping fuel demand.

The number of workers filing new claims for jobless benefits last week unexpectedly rose to 576,000 from 561,000 the week before.

The index of leading economic indicators rose for a fourth month in July, signaling that a recession is abating. The index rose a less-than-expected 0.6%, versus analyst forecasts for a 0.7% rise.

"It looks like the oil rally has stalled and we’re consolidating in the $72 a barrel range," said Gene McGillian, analyst at Tradition Energy in Stamford, Conn.

Crude prices have risen from lows below $33 a barrel in December amid hopes for an economic rebound.

Crude has been tracking gains in U.S. stocks. The S&P 500 index (SPX) rose 0.5% to 1281.09. The dollar was down 0.08% against a basket of foreign currencies.

Earlier, oil prices jumped to a seven-week high of $72 how to get a free credit report.88, supported by a 4.5% surge in Chinese stocks, with investors drawn to attractive valuations after a 20% plunge in Chinese shares over the previous two weeks.

Oil prices steadied after jumping 4.7% Wednesday, when data from the Energy Information Administration showed an unexpected steep drop in crude stocks last week.

Oil markets were also starting to focus on the Organization of the Petroleum Exporting Countries’ Sept. 9 meeting, where the producer group was expected to leave output targets unchanged, according to delegates and analysts.

OPEC last year agreed to a series of output cuts to help stem the sharp decline in oil prices.

In addition, traders focused on more efforts by financial regulators in the U.S. and Europe to stem violent oil price swings.

The United States Commodity Futures Trading Commission and the United Kingdom’s Financial Services Authority said they have agreed on steps to strengthen cross border supervision of energy futures markets.

The measures could prompt more reporting on the aggregate positions held by crude oil traders on both U.S. and British exchanges, analysts said. 

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The small business credit market is about to take another major hit. Six weeks after Advanta abruptly froze all of its 1 million credit-card accounts, lending giant CIT Group faces potential bankruptcy.

Following a flurry of media speculation, the ailing company announced late Wednesday that it would not receive government assistance. CIT said on its Web site that it is "evaluating alternatives."

Over the past nine months, the one-time financial services powerhouse has all but ceased making new loans, which left small business advocates and owners with mixed feelings about whether CIT should be left to fail.

CIT was historically the biggest issuer of Small Business Administration-backed loans, topping the agency’s lender list year after year. Last year, it made 1,195 loans through the SBA’s 7(a) program, totaling $766.6 million.

But in the wake of the credit crisis that followed Lehman Brothers’ September collapse, CIT’s lending came to a standstill. Since October, CIT (CIT, Fortune 500) has funded fewer than 100 SBA loans, totaling $65.7 million.

"In order to service its debt and meet obligations, [CIT] has been cutting back on new originations," explains David Chiaverini, research analyst at BMO Capital Markets.

CIT CEO Jeffrey Peek said in November that his company was "the bridge between Wall Street and Main Street," and "one of the few significant sources of liquidity for small and mid-sized businesses who are struggling to survive." But by then, CIT was already burning down its bridge, turning away many of the small businesses that had come to rely on the company.

Craig Moore is president of CiCi Enterprises, a pizza franchisor based in Coppell, Texas. CIT Group was CiCi’s go-to lender for financing new franchises.

"We had used them quite a bit in the past years because they made the process easy to get through. But at the end of last year, they tightened so quick they almost stopped lending to us overnight," Moore says.

Moore had 300 franchise candidates in the pipeline. Very suddenly, half of them couldn’t get loans and became non-viable, including 16 that had been working with CIT. Moore says some are still hanging on, hoping the credit markets loosen up, while other potential owners are tapping family and friends for startup money.

"We had a goal of building 80 stores this year and we may end up with 40. That drop is due to the financing issues," says Moore. "On a bigger scale, that’s 40 stores which each could have hired 35 employees."

Diverse financial services

CIT wasn’t just known for its startup loans. It also provided loans and lines of credit to existing small businesses. If the company falls into bankruptcy, those credit lines may vanish.

J.P. Morgan’s analysts estimate that CIT had $1.5 billion in unfunded commitments in March, primarily comprising untapped credit lines and other guarantees that customers could draw down if they chose. That’s a big deal for affected business, but it’s a comparatively small amount in the overall lending landscape. When Advanta froze its small business credit cards, it had about $5 billion in outstanding balances.

CIT is also a major player in factor financing. Factoring companies buy invoices from manufactures and retailers, immediately paying them a portion of the invoices’ face value and assuming the task — and the risk — of collecting payments from customers. For businesses that can’t afford to wait, factoring offers fast access to operating cash.

CIT Trade Finance processed a factoring volume of $8.3 billion in the first quarter of 2009, but there too, signs of the company’s cutbacks are showing. CIT’s factoring volume dropped 21% from the same quarter a year earlier, which the company attributed to the weakened retail environment.

If CIT now falls into bankruptcy, its factoring clients will need to find a new lender. Some may also be left chasing CIT for unpaid balances cash advance no fax. As of March 31, CIT held $2.7 billion in credit balances for its factoring client, according to an SEC filing.

Robert Saquet, president of Eggers Furniture, a retail store in Middleboro, Mass., is wondering how his shop will be affected if CIT disappears from the factoring market.

"Many manufacturers would not be able to stay in business without a factor creating immediate cash flow," Saquet says. Three of his largest suppliers use CIT as a factor. "Without a source of cash, they would have to demand pre-payment from retail stores. Retail stores are struggling and are not able to get the credit to raise more cash, so they would have to stop buying from factories that are not able to extend terms."

Soaring defaults

Small companies have been hit hard by the recession, and CIT is suffering in tandem with those it serves. Defaults and delinquencies are rising as cash-strapped business owners fall behind on their bills. Meanwhile, the value of the collateral pledged against CIT’s loans is deteriorating, as home and commercial real-estate prices plunge.

"The weak economic environment had a much greater impact on certain segments of our corporate loans portfolio than we have anticipated previously," CIT CEO Peek told analysts in a conference call to discuss the company’s most recent quarterly results.

CIT received $2.3 billion in TARP money in December and converted itself into a bank-holding company. But other help from the federal government has been elusive. CIT applied in January for access to a debt-guarantee program run by the FDIC, but its application has been left languishing. Analysts say there’s little chance at this point that it will be approved.

BMO Capital Markets’ Chiaverini sees bankruptcy as CIT’s most likely next step.

"The best case for CIT is to get its liquidity issues resolved — bankruptcy could actually get things back to normal on the lending front," he says. "If it does go into bankruptcy, I think what will happen is unsecured debt holders will convert their debt into equity and it will emerge stronger without the overhang of debt coming due. Then, it can start lending again."

Some small business advocates had been crossing their fingers for a bailout. In a letter to Treasury Secretary Timothy Geithner, the International Franchise Association said that "we are very concerned that allowing CIT to enter bankruptcy will send the wrong signal to small businesses on Main Street."

CIT’s financing volume is way down this year, but in past years it has been "one of, if not the, top lenders to the franchise industry," says IFA spokeswoman Alisa Harrison.

Lloyd Chapman, president of the American Small Business League, also issued a statement urging government assistance. "CIT’s unique ability to work with new entrepreneurs and small business owners trying to expand their businesses will be impossible to duplicate," he said. "If our hard-earned tax dollars are going to be used to save financial institutions, we should use those funds to save firms like CIT that have a 100-year track record of helping those small businesses where most Americans work."

CIT’s role in small business financing will be hard to fill, but for many companies, the damage is already happening. Saving CIT would only help Main Street businesses if the company became healthy enough to resume making loans.

CiCi’s President Moore is pleased that the government will not prop up CIT. Still, he realizes that his company’s fortunes are tied to those of CIT and its Wall Street brethren.

"A business will last only if it learns to live within rules," he says. "But I hope they come back alive, because then there’s a better chance we will flourish." 

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St. Louis — The news conference was meant to decry the lack of minority contractors on a bridge project, but it fell into disarray when one participant decided to climb onto a piece of construction equipment.

Others soon followed. And before that late June morning in 1999 was over, 31 people landed in a police lockup.

"After we got out that night, we decided we needed to do something bigger the next time," attorney and activist Eric Vickers recalled.

The day after the arrests, Vickers composed a letter to then-Gov. Mel Carnahan, threatening to block Interstate 70 in St. Louis if the state didn’t do something to increase minority participation on highway projects.

And 10 years ago today, a coalition of contractors, politicians and civil rights champions made good on that threat, bringing Monday morning rush-hour traffic along the interstate to a halt. It was an act of civil disobedience that continues to reverberate within the local construction industry.

"Nobody wanted to shut down that highway, but it opened a lot of doors," said Thomas L. Nellums Sr., the owner of TEE & E Trucking in St. Louis.

Indeed, activists and state officials acknowledge that the I-70 protest in 1999 sparked numerous changes for the better. A construction training program initiated in the aftermath of the protest has produced more than 1,000 graduates. Including minority contractors has become common practice, not only for highway work but on other major capital projects involving various institutions — the St. Louis Art Museum, University of Missouri-St. Louis and BJC HealthCare among them.

"We are doing things now to build relationships with the communities that are necessary to head off (those) types of issues," said Lester Woods, the external civil rights director for the Missouri Department of Transportation.

But some believe more needs to be done, and they say a protest similar to the one 10 years ago may be the best way to make their point.

CIRCUMVENTING RULES?

An organization called the African-American Business and Contractors Association contends that some injustices have yet to be addressed, noting how contracts have been allocated for the construction of the new, $640 million bridge connecting Illinois and Missouri.

Federal and state guidelines for minority participation give African-Americans and women equal footing, but state data show that the vast majority (88 percent) of the contracts set aside for those groups have gone to women-owned businesses, not African-Americans.

African-American contractors contend that white owners often circumvent the intent of those rules by transferring ownership to their daughters or wives.

"How can you win when the system is set up to help companies, who have been in business for 30 years, get family members certified (for minority ownership)?" said Carmell "Mack" Macklin, owner of Macklin Hauling.

Frank Haase, a white contractor who is president of R.G. Ross Construction Company, is a member of MO-KAN, the St. Louis Construction Assistance Center. MO-KAN is a consortium representing minority contractors that played an integral role in the interstate shutdown 10 years ago.

Haase acknowledges that some businesses occasionally flout the rules for women-owned contractors, but he said the practice was not widespread quick cash.

Nonetheless, black contractors are asking Illinois and Missouri to separate minority-owned firms from female-owned businesses in awarding contracts for the Mississippi Bridge project.

To draw attention to their concerns, the black contractors plan to commemorate the 10th anniversary of the shutdown with another protest Monday morning at an undisclosed location along I-70. Organizers say they will not take any action that should result in arrests.

"We have issues with (the Missouri Department of Transportation). They’re making progress, but they will have to improve," said Makal Ali, a protest organizer.

Some contractors, however, say a protest isn’t necessary this time. MO-KAN will skip the I-70 demonstration.

"We are sitting at the table (with Illinois and Missouri transportation officials), and we haven’t exhausted the means of getting to the place where we think we need to be," said Yaphett El-Amin, the group’s executive director.

‘NOT ENOUGH’ CHANGE

After the arrest of 31 demonstrators in 1999, minority contractors and advocates held discussions with state officials. The talks extended into simmering resentment among minorities over a highway bridge project at Taylor Avenue.

"All this construction was taking place in the heart of the black community, and no blacks were working on the project," said Anthony Thompson, the president and chief executive officer of Kwame Construction. "Getting attention of the community and the nation was the only way we could change the situation."

The meetings got the attention of the community. Persuading the Rev. Al Sharpton to join the shutdown guaranteed a national audience. Still, negotiations eventually faltered.

"They knew we were going to shut down the highway," Vickers recalled. "They just didn’t know how."

The plan called for vehicles driven by protestors to draw abreast of each other along I-70, gradually slowing eastbound traffic to a stop at Goodfellow Boulevard where other demonstrators, on foot, awaited.

It unfolded just as the organizers had hoped. An hour after the word to "move forward" sounded from a bullhorn, traffic began to flow again. There were no injuries.

All told, an estimated 300 people took to the highway that morning. Of those, 125 — including Sharpton — were arrested and charged with disorderly conduct.

A decade later, Vickers recalls the protest with pride. The community and the state did respond to the issues that were raised. More doors began to open for minorities.

But as Monday’s protest approaches, Vickers says he’s still not sure how he feels about it. Should he stand with the demonstrators? Or, should he stand aside, acknowledging that progress has been made and there are other ways to address inequities?

"It’s changed," he said. "But just not enough."

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European Union leaders warned of continued weakness in the banking system and pledged to “stay alert” to the possible need for further government support, according to the draft of a statement to be approved later today at a Brussels summit.

“The operating environment of the financial institutions remains challenging and credit flows continue to be constrained,” the heads of state and government said in the draft obtained by Bloomberg News. “Governments must therefore stay alert to possible further measures which may be needed to recapitalize or to clean up balance sheets.” profitability.”

European governments have approved $5.3 trillion of aid to banks, including debt guarantees and equity injections, since the onset of the financial crisis, according to a separate EU document obtained by Bloomberg. Regulators in the 27 EU nations will assess risks in the banking industry and report the results to finance ministers, the Committee of European Banking Supervisors in London said last month payday loans for bad credit.

“The ongoing EU-wide stress-testing exercise will help to better assess the financial system’s resilience, contribute to enhancing confidence of financial markets and facilitate coordinated policy measures at EU level,” the EU leaders said in today’s draft statement.

The worldwide financial crisis, which started with the collapse of the U.S. property market in 2007, has led to more than $1.46 trillion of writedowns and credit losses at other financial institutions, according to data compiled by Bloomberg, and sent the global economy into its first recession in more than six decades.

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European Union leaders warned of continued weakness in the banking system and pledged to “stay alert” to the possible need for further government support, according to the draft of a statement to be approved later today at a Brussels summit.

“The operating environment of the financial institutions remains challenging and credit flows continue to be constrained,” the heads of state and government said in the draft obtained by Bloomberg News. “Governments must therefore stay alert to possible further measures which may be needed to recapitalize or to clean up balance sheets.” profitability.”

European governments have approved $5.3 trillion of aid to banks, including debt guarantees and equity injections, since the onset of the financial crisis, according to a separate EU document obtained by Bloomberg. Regulators in the 27 EU nations will assess risks in the banking industry and report the results to finance ministers, the Committee of European Banking Supervisors in London said last month no fax cash advance.

“The ongoing EU-wide stress-testing exercise will help to better assess the financial system’s resilience, contribute to enhancing confidence of financial markets and facilitate coordinated policy measures at EU level,” the EU leaders said in today’s draft statement.

The worldwide financial crisis, which started with the collapse of the U.S. property market in 2007, has led to more than $1.46 trillion of writedowns and credit losses at other financial institutions, according to data compiled by Bloomberg, and sent the global economy into its first recession in more than six decades.

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As Chrysler morphs into a new company and as General Motors moves ahead with its bankruptcy process, injured plaintiffs are getting left behind.

Hundreds of plaintiffs have pending lawsuits against the automakers that are worth nearly $2 billion. They blame automotive defaults for their injuries, which in many cases are severe and crippling.

But their lawyers have doubts as to whether they’ll ever see any money because the plaintiffs are considered unsecured creditors in the bankruptcies. Therefore, they’re at the bottom of the repayment pool - if there’s even money left.

"We want all the people who have suffered injury, who have a lawsuit, to have their day in court," said Larry Coben, chairman of the Committee of Consumer Victims of General Motors and founder of law firm Coben & Associates in Scottsdale, Ariz. "[They] shouldn’t be lost in the shuffle here."

Coben, and his colleague Barry Bressler, are among a team of lawyers representing 170 injured plaintiffs in the bankruptcy proceeding who have sued Chrysler for claims worth $600 million and 300 injured plaintiffs who sued GM for claims worth $1.25 billion.

Bressler, a partner with the Philadelphia firm Schnader, Harrison, Segal & Lewis, has a client who was a passenger in a GM vehicle and was paralyzed when it crashed, allegedly because of a faulty seatbelt.

"The seatbelt snapped and broke her neck and she’s now quadriplegic," said Bressler. Bressler said that some of his clients are too disabled to care for themselves and they shouldn’t be abandoned by the bankruptcy court. "It’s really a shame what’s happening to these folks," he said.

Still, they know they could face a tough fight if anything is to be learned from Chrysler’s bankruptcy.

The Chrysler case

Bankruptcy Court Judge Arthur Gonzalez approved the transfer of Chrysler’s best-performing assets, including factories and dealership contracts, to the newly formed Chrysler Group LLC. Some factories, dealerships and creditors were left behind in the bankruptcy process, including pension funds from Indiana teachers and state police, as well as a "Major Moves" construction fund.

Indiana Treasurer Richard Mourdock appealed — first to the Court of Appeals, 2nd Circuit, and then to the U.S. Supreme Court — that the pension funds, as secured creditors, should have higher status than unsecured creditors.

But the Supreme Court gave the Chrysler bankruptcy a green light; Mourdock’s appeal succeeded only in delaying the process by a few days.

That does not bode well for the injured plaintiffs, whose open lawsuits against Chrysler are unsecured, meaning that they have lower priority than the Indiana pension funds online payday loans.

"If you have a judgment or a settlement you move to the front of the line," said Chrysler spokesman Mike Palese to CNNMoney.com. "But the filing of a liability lawsuit is not proof that there is a default with the vehicle."

Injured plaintiffs can try to lay claim to the Chrysler assets left behind in the bankruptcy process, but there won’t be much left, according to Bressler.

"There are probably going to be some assets left in old Chrysler and some claims to be decided," said Bressler. "[But] when you get all done liquidating that, you’re probably no more than half a cent on the dollar, and more likely zero."

Coben is concerned about the future impact because, he said, plaintiffs injured by defects in Chrysler vehicles made before the bankruptcy won’t be able to sue the new Chrysler.

"If you’re driving down the road and the wheel falls off and you roll over and get paralyzed from the neck down, they’ll replace your wheel [because it’s covered by warranty], but you can’t sue them for your injury," he said.

As a result, Coben said he will argue for "successor liability" in the GM case, where the open claims would be carried over to a newly formed company.

"We’re trying to get those folks who are representing GM, and that really means the Treasury, to allow successor liability for GM," he said. "If we can’t do that, we will certainly file objections to the proposed sale. You shouldn’t be allowed to do away with successor liability."

But Coben admitted it’s a long shot, unless he can convince the Treasury to intervene.

"Treasury was not involved in this decision, which the company made consistent with conventional bankruptcy practice," said Treasury spokeswoman Meg Reilly in an e-mail. "While unfortunate, the outcome would have been far worse had the government not intervened in the restructuring and Chrysler had liquidated."

But the prospects are much better for injured plaintiffs who have settled on a case. If the judge has awarded them damages prior to the bankruptcy filing, then they should still be able to receive their payments, according to GM spokesman Tom Wilkinson.

"Anything that is settled prior to the bankruptcy filing is settled," said Wilkinson. 

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Home mortgage rates jumped in the most recent week, pulled higher by skyrocketing Treasury yields.

The average 30-year fixed rate soared to 5.95% from 5.45% last week, according to a weekly national survey from Bankrate.com.

The 30-year rate is often influenced by the benchmark 10-year bond’s yield, which has increased steadily to hover around 4% recently. The yield was 2% just six months ago. Investors worry that this has re-ignited inflation fears and threatens the potential for economic recovery.

In an effort to cap mortgage rates, the Federal Reserve in March revealed a campaign to buy back $300 billion in Treasurys in hopes that it will spark demand and keep yields — and therefore, mortgage rates — in check.

Mortgage rates fell as refinancings abounded. But those benefits seem to have worn off, as rates have been on a tear in recent weeks.

Although mortgage rates continue to rise, they remain much lower than last year, when the average 30-year fixed mortgage rate was 6.48%.

Adjustable-rate mortgages: Those rising rates have made it difficult for many homeowners to refinance, but ARMs are an option, the Bankrate report noted.

Adjustable-rate mortgages were higher last week, with the average 1-year ARM rising to 5.16% and the 5-year ARM jumping to 5.49%.

"Bankers say ARMs got a bad rap in the mortgage debacle," the report continued, adding that the riskiest loans in the housing bubble –"subprime, low down payment, interest-only, negative amortizing and stated income" — tended to be adjustable-rate mortgages free car insurance quotes.

But the meltdown happened "because those loan features were layered on top of ARMs," the report said, meaning that it was not the adjustable rates that caused people to default. Rather, home buyers put no money down and "exaggerated their earnings when they applied for stated-income loans."

A few months ago, only about 1% of mortgage applications were for ARMs. Last week, it was 3.4%, the report added.

Other rates: The average 15-year fixed rate mortgage jumped to 5.37% from 5.06% the week prior.

The average jumbo 30-year fixed rate ticked up to 6.96% from 6.68%. Loans are considered "jumbo" when they are too large to be purchased or guaranteed by Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500). They carry higher rates than smaller "conforming" loans, which do have guarantees.

Have you applied for a loan modification or refinancing under the Obama administration plan? Did you run into roadbloacks or were you able to get a lower monthly payment and avoid foreclosure? We want to hear your experiences. E-mail your story to realstories@cnnmoney.com, and you could be part of an upcoming article. For the CNNMoney.com Comment Policy, click here. 

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The number of people filing initial claims for unemployment benefits fell last week, to their lowest level in more than 3 months, according to a government report released Thursday, suggesting the pace of decline in the job market is slowing.

But the number of people filing claims on an ongoing basis rose to a record high for the 14th straight week as employers remain reluctant to hire in the weak economy.

In the week ended May 2, a total of 601,000 people filed initial jobless claims, down 34,000 from an upwardly revised 635,000 in the previous week, said the Labor Department. It was the lowest level since the 590,000 claims filed in the week ended Jan. 24.

The total was smaller than expected. Economists had forecast 635,000 new claims, according to a consensus survey by Briefing.com.

The 4-week moving average of initial claims, which smooths out volatility in the measure, fell 14,750 to 623,500.

"We are seeing some improvement in the labor market," said Mark Vitner, an economist at Wachovia Economics Group. And Thursday’s report suggests "that the most recent peak in layoffs is behind us," he added.

But initial claims are expected to rebound in the coming weeks as now-bankrupt automaker Chrysler LLC shuts down plants and workers begin requesting benefits, Vitner said.

While the broader economy has show some signs of stabilization, analysts expect the job market remain weak even after economic conditions rebound.

The Labor Department is expected to report Friday that the nation’s unemployment rate rose to 8 low fee cash advance.9% in April from 8.5%, according to a survey of economists by Briefing.com. However, the number of jobs lost in April is expected to decrease 43,000 from the previous month to 620,000.

Continuing claims: The number of people continuing to file jobless claims rose to a fresh all-time high, indicating that more people are struggling to reenter the workforce.

"There’s no evidence that hiring has picked up and continuing claims increased further," Vitner said.

In the week ended April 25, the most recent data available, 6,351,000 continuing claims were filed. That’s a record high and an increase of 56,000 from the previous week.

The 4-week moving average for continuing claims was was 6,207,250, an increase of 125,250 from the prior week.

Signs of life: Thursday’s report comes one day after two private sector reports showed the job market is improving slightly.

Automatic Data Processing, a payroll processing firm, said private-sector employment decreased by 491,000 in April, a 31% improvement from the revised 708,000 drop in March. Economists had expected a loss of 643,000 jobs.

Separately, outplacement firm Challenger, Gray & Christmas Inc. reported that the number of announced layoffs fell for the third consecutive month in April, dropping 12% to 132,590.  

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This earnings season, no company may have more on the line than Bank of America.

The last three months have been a painful time for the Charlotte, N.C.-based banking giant. There has been the never-ending string of headaches associated with last year’s fateful purchase of Merrill Lynch, including a bonus scandal that the company can’t seem to shake.

At the same time, there has been no shortage of criticism from shareholders about its stock price. Management has also been working hard to convince investors that last year’s purchase of mortgage lender Countrywide was a smart move.

Elevating the stakes even further is the fact that many of Bank of America’s peers, such as JPMorgan Chase (JPM, Fortune 500), Wells Fargo (WFC, Fortune 500) and Goldman Sachs (GS, Fortune 500), have shattered profit expectations so far this quarter.

Even Citigroup (C, Fortune 500), which has struggled mightily for more than a year to untangle itself from the big bets it made on the U.S. housing market, managed to eke out a profit of $1.6 billion in the latest quarter, much to Wall Street’s surprise.

"[Bank of America] should theoretically have many of these same positive ingredients in its [first quarter] results," Nancy Bush, bank analyst and founder of NAB Research LLC, wrote in a note to clients last week. "If not - look out."

Analysts are currently betting that BofA will swing back into the black when it reports on Monday, after suffering a $1.79 billion loss last quarter. Current expectations are for the company to report a profit of $615 million, or 5 cents a share, according to Thomson Reuters.

To be fair, there have been a couple of bright spots for Bank of America in recent months, including a recent mortgage refinancing boom and widening profit margins on loans thanks to lower interest rates.

And there is the reigning belief that the bank is one of the best positioned to grow once the economy turns the corner, helped in no small part by its two high-profile, albeit controversial, purchases last year.

But industry analysts worry that many large lenders, including Bank of America, will face continued deterioration across a variety of loan portfolios, which will ultimately weigh on bank results at least for the remainder of the year.

JPMorgan Chase, for example, revealed rising credit costs in its sizeable credit card division and with so-called jumbo mortgages, or loans of more than $417,000. Jumbos have been a pocket of the housing market that has held up relatively well until now.

Friedman Billings Ramsey analyst Paul Miller points out that Bank of America is also a big player in credit cards and jumbo mortgages. What’s more, he worries that the bank’s commercial and industrial loan portfolio, which he estimates to be worth somewhere in the neighborhood of $280 billion, could be the next problem area for BofA online instant cash advance.

"We do know that credit trends are worsening," said Miller. "You are not looking at losses peaking until the middle part of 2010."

Trying times for Ken

But the bank’s woes extend beyond just the company’s income statement and balance sheet. While investors and taxpayers are angry at many bank executives in the wake of the credit crisis and resulting bank bailout, BofA chairman and CEO Ken Lewis arguably faces the biggest credibility gap of any bank leader.

Both shareholders and taxpayers were incensed after it was revealed in mid-January that Bank of America needed an additional $20 billion in government funds, along with guarantees on $118 billion in assets, to help the company absorb last fall’s purchase of Merrill Lynch.

BofA had already received $25 billion from the government, which included $10 billion for Merrill Lynch, during the first round of the financial bailout.

Much of the outrage has failed to moderate in the months since, which means Bank of America will have many questions to answer from critics after it reports its results and at the company’s annual shareholder meeting later this month.

Two activist shareholder groups — CtW Investment Group, an investment advisor to pension funds and Finger Interests, which holds 1.1 million in company shares — have been running an aggressive campaign aimed at ousting lead director O. Temple Sloan and members of the company’s asset quality committee for failing to spot the problems at Merrill before the deal was completed.

But perhaps the biggest change could come directly at the top. Two independent proxy advisory firms have all thrown their support behind a proposal which would split the role of chairman and CEO. That proposal is considered a direct challenge to Lewis, who has held both positions since 2001.

Few would deny that Lewis helped transform Bank of America from a regional banking giant into the nation’s largest bank based on deposits during his leadership. And until now, many viewed him as one of the savviest bankers in the industry.

But with the company’s stock continuing to trade 74% below its yearly highs and the taint of the Merrill purchase still fresh in the minds of investors, Lewis may have no other choice but to relinquish some control.

Then again, one analyst who asked not to be named suggested that if Bank of America reports results as strong as its peers and the stock goes up, that could go a long way toward redeeming Lewis in the eyes of shareholders.

"Good numbers always get you more time than bad numbers do," he said. 

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The number of people filing initial claims for unemployment benefits fell last week, while those filing for continuing claims hit an all-time high for the 11th straight week, according to a government report released Thursday.

In the week ended April 4, a total of 654,000 people filed initial jobless claims, lower than the previous week’s upwardly revised 674,000, the Labor Department reported.

The upwardly revised total for the week ended March 28 was the highest for weekly claims since October 1982.

The 4-week moving average of people filing initial claims for unemployment benefits - which smoothes out weekly volatility - was 657,250, a decrease of 750 from the previous week’s revised average of 658,000.

A consensus estimate of economists polled by Briefing.com expected 660,000 first-time filers last week.

One economist was hopeful that the drop was a sign that the jobless claims have peaked.

"We have good reason to look at this drop off from this high level - tentatively - that we may have seen the peak," said Robert Brusca, chief economist at Fact and Opinion Economics.

The number of people continuing to file for jobless benefits rose to 5.84 million in the week ended March 28, the latest week for which the data was available. The number of people filing continuing claims marked an increase of 95,000 from the previous week’s revised level of 5 emergency cash loans.75 million.

The reading on continuing claims was the highest number since the government began keeping records in 1967, and the 11th consecutive week that continuing claims rose to a record high.

The 4-week moving average of continuing claims was 5.65 million, an increase of 146,750 from the previous week’s revised average of 5.5 million.

The recession forced business owners to chop away at their headcount in order to bring down overhead spending.

Last Friday, the Labor Department reported that employers cut 663,000 jobs in March and the unemployment rate rose to 8.5% from 8.1% in February. The unemployment rate was the highest since November 1983.

Brusca is optimistic that the recovery in the economy should be as quick as the deterioration was. He said the economy should begin to recovery 8 weeks beyond the peak in claims.

"When you have a sharp and deep recession, sharp job losses, then the trough of the recession tends to be the trough for jobs, and the peak in the unemployment rate tends to come very close to that trough," said Brusca.  

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