Small-cap stocks drifted into positive territory mid-morning, but slipped back into the red into midday action, with support from energy, homebuilder and commodity stocks offset by weakness in the financial arena. At 12:58 p.m. ET, the Russell 2000 (NYSE:IWM) was down 2.36, or 0.33%, at 716.63.

The market made a nice recovery off opening lows, but the move stalled out just above Thursday’s highs. It has been a volatile, churning weak for stocks, but right now the Russell is basically unchanged for the week despite several dramatic moves.

This morning’s latest batch of economic data served up a negative tilt, with retail sales coming in below expectations and the “core” inflation producer price index in line with the forecast. A sentiment survey later this morning was upbeat, which may have helped the market pull off the opening swoon. Still, the weekly claims report from Thursday was a negative, and today’s reports on spending and inflation certainly didn’t suggest any turnabout for a gloomy economic horizon.

The overall market continues to fret about the future of the nation’s fourth largest investment bank — Lehman Brothers Holdings Inc. (NYSE:LEH), which is openly courting suitors after a stunning collapse in market value this week. LEH was down another 15% below $4 a share at midday today, a jarring demise from the upper $40s in May. In addition, American International Group (NYSE:AIG), the world’s largest insurer, was reeling amid 26% declines today, keeping the entire financial sector in a nervous state.

Individual small caps on the move today were highlighted by PharmaNet Development Group Inc. (Nasdaq:PDGI), which collapsed 55% after restating 2008 guidance. Cardtronics Inc. (Nasdaq:CATM) was off 10%, tumbling to the lowest point since early April.

It will be interesting to see how action shakes out this afternoon. Thursday saw a dramatic late rally, but investors may be a little less comfortable taking home long positions into the weekend with all of the financial uncertainty in the air. Look for support this afternoon in the Russell 2000 at 711.50, then at 704.50. Meanwhile, resistance is at 720.50 and 726.