Small caps sink, unable to sustain opening bounce

Small-cap stocks opened higher but quickly slipped into negative territory, as a bounce in banking and commodity stocks and a rise in overseas equities was countered by weak profit reports for a raft of small-cap firms. The market is clearly oversold following dramatic losses this week, which could power a pre-weekend short-covering bounce, but fear about the slumping global economy remains a big part of negative investor psychology. At 10:00 a.m. ET, the Russell 2000 (NYSE:IWM) was down 4.29, or 1.11%, at 381.02, sinking to yet another new bear market low.

On the banking front, shares in Citigroup Inc. (NYSE:C) have absolutely collapsed in recent days and the firm’s management is reportedly meeting today to discuss strategy to shore up confidence in the massive banking firm. The bank’s CEO said today that they are not looking to spin off Smith Barney and that “rumor mongering” was to blame for some of the recent decline in stock value. C stock was up 11% shortly after the open and financial shares in general were on the rise, with the Financial Select Sector SPDR up 3.5%.

On the retail front, Wal-Mart Stores Inc. (NYSE:WMT) CEO announced he was stepping down. WMT has been one of the few bright spots in a dreary year for equities, and investors took today’s news in stride. WMT shares were up 1.6% and the S&P Retail Index was up 1.2%.

A big part of the action this week has been massive flight to safe haven ports and out of stocks, which drove yields on Treasury products to historically low levels. This morning, the bounce in equities has created a big bounce for Treasury yields, with the 10-year note yield up 5.8%.

On the commodity front, crude oil prices rebounded about $0.75 a barrel into . . .

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