The Dow Jones Industrial Average (DJINDICES:^DJI) is on the rise today as some decent economic news hits the wires this morning. Strong orders helped buoy China's manufacturing sector this month, as the Markit/HSBC Purchasing Managers Index hit 50.9, smashing expectations of a mere 50.4. The figure represents the highest reading in seven months and is far above September's tepid 50.2 result.

Domestically, the Department of Labor issued its weekly reading of initial jobless claims, which fell by 12,000 to 350,000 from last week's adjusted figure of 362,000.

Highs and lows in the banking sector
Banks are a mixed bag this morning, as Goldman Sachs clocks a nearly 1.5% gain by noon EDT, compared with JPMorgan Chase (NYSE:JPM), which is down by 0.6%. Banks are facing some pretty lousy news today as the U.S. Department of Justice steps up its investigation of pre-crisis mortgage-backed securities sales. Not surprisingly, big banks named in the newest investigation include Goldman, JPMorgan Chase, and Bank of America (NYSE:BAC).

JPMorgan's own problems are likely being compounded by the news that former Dow component Bank of America has been found guilty of fraud in the so-called "Hustle" case brought by the U.S. government. Prosecutors alleged that Countrywide, purchased in 2008 by Bank of America, deliberately defrauded Fannie Mae and Freddie Mac by selling the agencies mortgage-backed securities loaded with mortgages that were created without paying much attention to quality. Yesterday, a federal jury in Manhattan agreed.

JPMorgan hustling to settle cases
JPMorgan Chase is embroiled in its own legal morass pursuant to toxic MBSes. As the bank moves closer to settling with federal regulators for $13 billion, it also looks to settle up with a group of institutional investors regarding claims for another $5.75 billion.

On top of all that, regulators are now turning their attention to JPMorgan's involvement with Ponzi-schemer Bernie Madoff, alleging that the bank ignored what it must have known were questionable business dealings in that area.

More could be in the pipeline, as well. The government used a little-known law, the Financial Institutions Reform, Recovery and Enforcement Act, against Bank of America in the Hustle case, and FIRREA was also wielded against JPMorgan Chase pursuant to the current $13 billion settlement, according to The Wall St. Journal. Having met with success in the B of A case, it's quite possible that prosecutors will be engaging in a rinse-and-repeat cycle of suits against the big banks they holds responsible for the financial crisis.

Fool contributor Amanda Alix has no position in any stocks mentioned. The Motley Fool recommends Bank of America and Goldman Sachs. The Motley Fool owns shares of Bank of America and JPMorgan Chase. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.