We saw a host of regional banks report stubbornly high loan losses on Monday, and investors have grown skittish about the regional banks that still have yet to report quarterly results. Sterling Financial (Nasdaq: STSA), Pacific State Bancorp (Nasdaq: PSBC), Midwest Banc Holdings (Nasdaq: MBHI), and W Holding (NYSE: WHI) all saw their shares fall by -15% to -20% in Tuesday trading. These banks all share a common trait: their market caps have shrunk to troubling low levels. The string of FDIC-induced bank closures may continue for a while.

That would be good news for the healthier banks, which would have a chance to pick up their weakened brethren at fire-sale prices. Indeed many banks have traded up recently, as the Nasdaq Bank Index (Nasdaq: NAS) has risen nearly +25% in the last three months.

Tuesday morning trading has not been kind to investors in home furnishing retailer Tuesday Morning (Nasdaq: TUES), which is falling sharply for a second straight day after reporting tepid fiscal third-quarter results Monday. As the stock continues to drop, so does the interest. In these situations, it pays to monitor a stock, and hold off taking any action until shares have truly found a floor. For retailers like Tuesday Morning, an eventual decline in unemployment rates could be the catalyst to get investors focused on a potential increase in same-store sales — and profits.

Analysts at Jefferies have a bit of egg on their face today after talking up shares of Office Depot (NYSE: ODP) on Monday. The analysts’ bullish preview of first quarter results pushed shares up above $9 on Monday to a 52-week high on an intra-day basis. Shares gave back all of those gains – and more – in Tuesday trading, as sales and profits missed estimates. A lackluster outlook for the second quarter also weighed on shares.

But this is a late cycle play on the economy, closely tied to the unemployment rate. As companies start to hire again, their need for office supplies will grow commensurately. So the analysts at Jefferies may ultimately prove correct but premature. When the business turns, the stock could prove to be a real bargain: Office Depot earned an average of $1.28 a share from 2004 to 2007. The company’s foot print has shrunk somewhat since then, but earnings power of $1 a share is quite feasible when the economy turns. That’s not a bad run rate for an $8 stock.