Small-cap shares opened in the red Tuesday, and continue to recoil in the shadow of the highs set after last week’s employment report pushed the market to a four-month peak. At 9:50 a.m. ET, the Russell 2000 (NYSE:IWM) was off 3.97, or 0.55%, at 720.37. Renewed jitters about the housing market and credit crunch appear to be in play, especially after Countrywide Financial Corp. (NYSE:CFC) took a big hit Monday and then Fannie Mae (NYSE:FNM) tumbled 3.2% on the opening after soft earnings.

Another factor weighing on the market is a firm tone in crude oil prices, which hit record highs Monday and then topped that record again this morning. Crude prices have been bid up on supply issues out of Africa and concern that conflict in Northern Iraq could endanger the pipeline in that area, but Nigeria is back to normal production after a multi-day strike and Iraq is old news. However, a prominent analyst firm reportedly raised its outlook for crude oil prices, which may have driven buyers back into the fray. It should be noted that any supply side bullish issues are being played out against a backdrop of softer demand as consumers shy away from record high pump prices ahead of the key summer driving season in the United States.

The political arena seems to have retreated a tad in recent weeks even though the Democratic race for a candidate is still up in the air. However, there are two big Democratic primaries on tap today in Indiana and North Carolina, which . . .

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