Shares of regional banks mostly rose Friday, even as the broader market dropped on renewed concern about the economy after the Labor Department reported a spike in the unemployment rate.

U.S. banks will unleash a tide of poor quarterly results over the next two weeks, yet investors may choose to focus instead on when a recovery might be at hand and how much more capital raising and dividend cutting will be needed to achieve it.

Fifth Third Bancorp, a large U.S. regional bank, said it planned to raise at least $2 billion in capital and would slash its dividend by 66 percent to cope with mounting credit losses.

KeyCorp, a large U.S. Midwest regional bank, said on Friday it raised $1.65 billion, 10 percent more than planned, to bolster its capital base.

Stocks pulled back following news that the Microsoft-Yahoo deal is off. Earlier, the market had rallied as oil prices receded, retail sales came in better than expected and merger in the beverage industry got investors jazzed up.

KeyCorp , a large U.S. Midwest regional bank, said it plans to raise $1.5 billion in equity capital and cut its dividend in half, following an adverse federal court ruling over the tax treatment of leveraged leases.

Stocks were well off their highs but still posting solid gains after unexpected strength in retail sales and a multibillion-dollar takeover bid in the brewing sector.

Morgan Stanley analysts Monday told clients to "sell the rally" in financial stocks, slashing forecasts for big bank earnings and warning that the current credit crunch is only just beginning.

Want to position your portfolio for the recovery? Then fly in the face of the crowd calling for big-cap equities. So says William Greiner, chief investment officer of UMB Asset Management. He told CNBC he believes the U.S. is already in a recession -- and says the best thing to do is buy small-cap stocks.

Stocks finished slight lower Wednesday as the financial-driven rally that kicked off the quarter Tuesday lost steam. Energy, retail and chips finished mostly higher.

National City is reportedly in talks to sell itself to Cleveland neighbor KeyCorp, among other banks, but the bank is taking a long time to find buyers, triggering investor fears that it will not be able to sell much above its current share price.

Stocks wobbled at the open Wednesday as the market looked to Federal Reserve Chairman Ben Bernanke, testifying on Capitol Hill today and tomorrow, for direction.

Stocks wobbled at the open Wednesday as the market looked to Federal Reserve Chairman Ben Bernanke, testifying on Capitol Hill today and tomorrow, for direction.

National City, which has been battered by the housing downturn, is considering a plan to sell itself to rival KeyCorp, the Wall Street Journal reported on Wednesday, citing sources familiar with the matter.