Slip on banking worries, weak techs

Small-cap stocks opened flat, but pushed lower amid concerns about banking stocks, which rekindles fears of the credit crunch. In addition, tech stocks were soft, which played into the selling tone. At 10:01 a.m. ET, the Russell 2000 (NYSE:IWM) was down 3.49, or 0.77%, at 449.68.

The weekly claims report came in at 524,000, which was fairly close to the projection of 520,000. Last week’s figure was revised upward sharply, but that was not a big surprise as most viewed last week’s number as an oddity. Elsewhere on the data front, the New York Manufacturing Survey came in at minus 22, which was slightly better than the forecast of minus 25, but which is still an awful number historically. The PPI report came in at minus 1.9%, very close to the projection of minus 2%, but no one is really worried about inflation right now anyhow. The Philly Fed survey was reported at minus 24.3%, which was better than the minus 35 forecast, but like the NY number, still weak historically.

In overseas action, European stocks were on track to decline for a seventh consecutive session, as investors were disappointed that central bank officials only slashed 50 basis points off the benchmark interest rate. The health of banks is a big concern here in the United States and also in Europe.

Speaking of banks, JP Morgan Chase and Co. (NYSE:JPM) reported better-than-expected quarterly results after the close Wednesday afternoon, but the bloom quickly fell off the rose for banks as Bank of America Corp. (NYSE:BAC) said they will need additional funds to absorb the Merrill Lynch acquisition. Shortly after the open, JPM was up 3.2%, while BAC was down 9.3%. Citigroup Inc. (NYSE:C) continued to reel, sinking some 9% shortly after the open.

Technology shares were in retreat mode overnight, but opened up much better than feared. Apple Inc. (Nasdaq:AAPL) was leading the bearish way amid reports that CEO Steve Jobs will take a medical leave of absence. AAPL shares were down 4.1% early this morning.

RealtyTrac reported that foreclosures soared 41% in December versus year-ago levels and for the year foreclosure filings were up 81% as homeowners struggled . . .

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